Category: EU trade policy

Overview of the EC Trade Policy Review and the Impact of EU Behind Border Concerns The EU Trade Policy Review Part 1

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Summary
The EC sets out 3 core trade policy objectives: Supporting the recovery and fundamental transformation of the EU economy in line with its green and digital objectives’; ‘Increasing the EU’s capacity to pursue its interests and enforce its rights, including autonomously where needed’; ‘Shaping global rules for a more sustainable and fairer globalisation. Difficult operational choices will be faced in reconciling these three objectives, with this revolving around the question of who pays for the costs of more sustainable and socially responsible production processes, which at the same time delivers decent and more sustainable livelihoods for developing country producers? Care will need to be taken in ensuring the pursuit of EU interests and enforcement of EU rights does not become the dominant pillar of the EU’s new trade policy. Read more “Overview of the EC Trade Policy Review and the Impact of EU Behind Border Concerns The EU Trade Policy Review Part 1”

An Alternative View on EU-West Africa Poultry Sector Trade: A Review of the European Commission’s West Africa-EU Poultry Sector Briefing

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Summary
This article has a different structure to the normal epamonitoring.net articles, with it being structured as commentary on recent EU information materials supplied in the context of discussions over the coherence of EU poultry sector trade policy in West Africa. This paper was released as background to planned discussions on the EU’s poultry sector trade relationship with West African countries, the European Commission circulated an information note setting put the EC perspective on this trade. It sought to:

  • Assert how EU poultry production growth was demand driven, but largely neglected the impact which the EU’s tightly regulated poultry meat import regime on investment and production decisions in the EU poultry sector.
  • Set out the phenomenal increase in effective consumer demand for low-cost protein which was underway prior to the Covid-19 pandemic, a development which is incontestable.
  • Explore the structure of poultry meat production and demand in West Africa and the constraints on competitive production faced, which undoubtedly exist.
  • Sought to explore the issue of the right balance required between domestic production and imports, given evolving West African demand.
  • Argue the EU provides no subsidies to EU poultry production and trade.
  • Outline the scale of EU development assistance to agricultural development in West Africa.
  • Briefly explore the impact of the Covid-19 pandemic and the EU’s health focussed ‘farm to fork’ strategy.

The following paper seeks to critically reflect on the arguments set out by the European Commission in this paper, with a particular focus on the impact of the EU’s trade policy in regard to EU imports of poultry meat and the sharp contrast this provides with the EU’s evolving approach to the use of trade policy tools by African governments in the poultry sector. Read more “An Alternative View on EU-West Africa Poultry Sector Trade: A Review of the European Commission’s West Africa-EU Poultry Sector Briefing”

South Africa Poultry Producers Seek Further Anti-Dumping Duties

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Summary
The South African Poultry Association has applied for anti-dumping duties on imported chicken from five countries, Brazil, Denmark, Ireland, Poland, and Spain. The four EU member states accounted for around 95% of total EU frozen chicken and offal exports to South Africa in 2019-20. The hard reality facing South African poultry producers is that since 2012 the average price paid for imports of these products from the EU has fallen 24%, while prior to the introduction of Avian Influenza based phytosanitary restrictions in December 2016, import volumes more than doubled. Given the challenges posed by the under-reporting of the value of imports, false classification of imports and fraudulent declarations other policy measures such as minimum import price requirements may need to be considered. Additional measures may also be required on public health ground to improve handling practices and traceability in cases of food poisoning outbreaks. Read more “South Africa Poultry Producers Seek Further Anti-Dumping Duties”

The Case of Cocoa What Does the New EU UK Trade Agreement Mean for ACP Triangular Supply Chains?

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Summary
The simple change of tariff heading rules of origin requirements for simple value-added cocoa products (1803, 1804 and 1805) included in the EU/UK trade agreement means the existing ACP cocoa supply chains within which the processing of ACP cocoa beans takes place in the EU prior to onward shipment to the UK will face no disruption as a result of the new EU/UK trade arrangements.  However, more complicated rules of origin are faced for cocoa products containing sugar which fall under tariff heading 1806. In addition, the absence of ‘diagonal cumulation’ provisions in the EU/UK trade agreement, means ACP value added   cocoa products shipped to the UK via the EU will in future need to remain under customs supervision prior to landing in the UK; with extensive use being made of the Common Transit Convention (CTC) in the handling of such cargoes. However, currently there are serious infrastructure and human capacity constraints on the UK’s efficient operation of CTC procedures. This will complicate the immediate use of such arrangements. Scope for moving over to direct shipments to the UK would also appear to face some transitional challenges given current UK port congestion. More serious problems would appear to be faced in regard to onward trade from the EU to the UK in high sugar content value added cocoa product supply chains (e.g., chocolate bars) where these have traditionally used ACP sourced sugar. The absence of ‘diagonal cumulation’ provisions means manufacturers will need to shift over to the use of ‘wholly obtained’ EU or UK sugar, if eligibility for duty free access for high sugar content value added cocoa products is to be retained. Read more “The Case of Cocoa What Does the New EU UK Trade Agreement Mean for ACP Triangular Supply Chains?”

Growth in EU27 Poultry Meat Exports Projected on the Basis of Continued EU/UK Duty Free Trade

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Summary
While the rate of growth in EU poultry meat exports is slowing down, the EC projects a continued expansion of EU exports up to 2030 on the back of a continued expansion of EU poultry production. While the December 2020 EU/UK trade deal will avert the imposition of standard MFN tariffs on EU/UK mutual trade in poultry products, the introduction of standard 3rd country import control requirements will generate some trade disruption.  This will largely affect UK poultry meat exports to the EU27. The trade in value added food products containing poultry meat is also likely to be complicated by new rules of origin requirements for EU/UK trade, given no agreement has been reached on ‘diagonal cumulation’ arrangements. These issues are likely to lead to some level of trade displacement of mutual EU/UK trade in poultry products to 3rd country markets. This is most likely to result in increased UK exports of poultry parts to non-EU27 markets. Read more “Growth in EU27 Poultry Meat Exports Projected on the Basis of Continued EU/UK Duty Free Trade”

Appointment of Chief Trade Enforcement Officer Could Signal a Push More Rigorous Enforcement of EPA Commitments Made by ACP Governments

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Summary
The appointment of an EU Chief Trade Enforcement Officer is likely to see the EU more rigorously enforce the commitments entered onto by ACP governments under EPAs. Particular concerns arise in regard to the interpretation and application of provision dealing with trade defence mechanisms established under the EPAs (safeguard and anti-dumping provisions), the ‘Prohibition of quantitative restrictions’, and ‘National treatment’. The rigorous interpretation and enforcement of these commitments could undermine national agri-food sector development strategies across a wide range of ACP countries.  There are concerns disputes with ACP countries constitute areas for ‘early wins’ for the CTEO, given the limited legal capacity of ACP governments to engage in dispute settlement processes and the limited scope for ACP retaliatory action. Particular concerns arise in product areas where a no-deal Brexit could generate severe EU/UK trade disruptions (e.g. the poultry meat sector) and ACP markets are major outlets for EU exports. Read more “Appointment of Chief Trade Enforcement Officer Could Signal a Push More Rigorous Enforcement of EPA Commitments Made by ACP Governments”

South Africa’s Poultry Sector on the Road to Recovery as Stricter Trade Regime Applied

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Summary
According to analysis from the United States Department of Agriculture, Foreign Agricultural Service, the South African poultry meat sector is recovering following a post drought recovery of maize crops which has lowered feed costs, agreement on a Poultry Sector Master Plan and the application of new trade policy measures designed to provide relief from low cost poultry imports. However, there is a hole in South Africa’s poultry sector trade policy arising from the de facto effect of EU-South Africa trade agreements. These exclude EU exporters form general tariff changes and profoundly undermine the effectiveness of the anti-dumping and safeguard measures nominally allowed under these agreements. This situation is compounded by legal loop-hole challenges from the EC of South African safeguard measures, which if upheld would seriously undermine the development dimension of EU trade agreements with sub-Saharan African trade partners. Read more “South Africa’s Poultry Sector on the Road to Recovery as Stricter Trade Regime Applied”

Freight Pressures Remain on Kenyan Horticultural Exporters with Covid Clouds Still Loom Over the Sector

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Summary
While a partial recovery in commercial flights is underway this is focussed on intra-European flights, with inter-continental flights excluding the EU, still less than 60% of their January levels. With East-West routes better able to bear rising freight costs, African exporters will face continued air freight challenges, particularly as air freight demand rises in the face of the rolling out of a global vaccination programme. Given the economic significance of the air freight export sector to the Kenyan economy, there is a need for the designation of East African focussed air freight services as a ‘strategic autonomy’ sector, with normal rules related to state supported lending being waived. There is also a need to systematically review Kenyan production and export patterns, to see which export products remain commercially viable at higher freight rates and which export products can be shifted to sea freight.  This review will need to take into account the increased costs which will be faced in trading into the UK market via initial ports of landing in mainland EU countries. These new costs along triangular supply chains are now inevitable given the state of play in EU/UK trade negotiations, with the only uncertainty being the scale of these increased costs. This will be impacted by the basis on which the UK finally leaves the EU customs union and single market. Read more “Freight Pressures Remain on Kenyan Horticultural Exporters with Covid Clouds Still Loom Over the Sector”

Implementation of New EC Organic Products Regulation Postponed but Unresolved Brexit Issue Threatens Commercial Gains of ACP Organic Production

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Summary
The deferment of the implementation of EU’s new organic regulation offers a precedent for addressing the commercial losses ACP organic exporters face if there is no EU/UK organic equivalence agreement in place by 1st January 2021. The lapsing of EU/UK mutual recognition of organic certification on 3rd country products should be deferred until the end of the Covid-19 pandemic plus 9 months, given the travel restrictions and social distancing requirements which complicate the securing of UK or EU27 specific organic certification at the present time. This would avert needless commercial losses for ACP organic exporters and encourage the continued growth in ACP organic exports, which are wholly consistent with both EU and UK sustainability objectives. Read more “Implementation of New EC Organic Products Regulation Postponed but Unresolved Brexit Issue Threatens Commercial Gains of ACP Organic Production”

EU Led Sustainable Cocoa Initiative Formally Launched

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Summary
The EU sustainable cocoa initiative while welcome, needs to get to grips with the central issue of ensuring sustainable livelihoods which lift cocoa farming communities out of the endemic poverty which characterises the sector. If sustainability initiatives are launched which address environmental  and child labour concerns in ways which place livelihood issues as an afterthought, then these are likely to be unsustainable, since it will not get the necessary farming community ‘buy-in’ required to finally put an end to both the use of child labour and unsustainable farming practices in the cocoa sector. Any such initiative needs to be rooted in financially incentivising through the market the production of child labour free and environmentally sustainable cocoa. This essentially has to address the issue of the distribution of revenues and costs along supply chains, with the existence of legally enforceable mechanisms to systematically remove non-compliant cocoa from European cocoa supply chains being a necessary complement to action in this core area. Read more “EU Led Sustainable Cocoa Initiative Formally Launched”