Study confirms importance of non-tariff trade measures to EU agriculture
Summary:
While an study of future trade agreements with the EU’s major agro-food sector trade partners validate the EU’s continued use of non-tariff trade policy measures to protect EU agriculture, EU EPAs are requiring ACP governments to abandon the ue of such policy tools. This raises important issues of EU policy coherence.
In mid-November 2016 the European Commission released the findings of a study which sought to evaluate the ‘potential effects of future trade agreements’ with 12 important partner countries on the agriculture sector. According to the EC press release, the study ‘validates (the) current EU approach of systematically protecting sensitive sectors’.
The EC Vice President Jyrki Katainen noted these sensitivities require the EC’s trade negotiating strategy to ‘protect our vulnerable sectors through measures such as tariff rate quotas, while maximising our positive interests whenever possible’. Similarly Agricultural Commissioner Hogan stressed ‘the use of TRQs for sensitive products, as one would normally associate with trade agreements, is important to strike a balance for EU agriculture’.
While stressing the importance of the use of TRQs the EC press release noted ‘the impact of measures used by the EU to protect vulnerable sectors in trade deals, such as the systematic use of limited tariff rate quotas’ was outside the scope of the study.
Nevertheless the EC press release highlighted the results of the study which confirmed ‘the EC’s current approach of limiting the liberalisation of imports of sensitive agricultural products in all trade negotiations is the right one’.
This however needs to be seen in the context of EC’s long-standing trade policy commitment to securing the systematic removal of all non-tariff barriers to EU exports (particularly agro-good exports), where the use of non-tariff measures are seen as the principal obstacle to the continued growth in EU exports.
As early as June 2007 the EU Agriculture Commissioner was arguing the EU ‘must have an offensive strategy for promoting and exporting agri-food products’, with in many instances the main challenge being ‘long, long lists of non-tariff barriers – some of which block exports from our side altogether’. The Agriculture Commissioner pointed out these non-tariff barriers ‘will not go away by themselves’ and therefore the EU ‘must make a determined effort to dismantle them’.
Sources:
JRC, ‘Cumulative economic impact of future trade agreements on EU agriculture’, Executive Summary, 2016
http://publications.jrc.ec.europa.eu/repository/bitstream/JRC103838/lbna28200enn.pdf
JRC, ‘Cumulative economic impact of future trade agreements on EU agriculture’, Full report, 2016 http://publications.jrc.ec.europa.eu/repository/bitstream/JRC103602/lb-na-28206-en-n_full_report_final.pdf
EC, ‘Commission presents study on impact of future trade agreements on the agricultural sector’, press release, 15 November 2016
http://europa.eu/rapid/press-release_IP-16-3672_en.htm
EC, ‘Economic study on the cumulative effects of trade agreements on the EU agricultural sector – Frequently Asked Questions’, 15 November 2016
http://europa.eu/rapid/press-release_MEMO-16-3673_en.htm
EC, ‘Going on the offensive: a new approach to EU agri-food exports’, speech Agricultural Commissioner Mariann Fischer Boel, address at the AGRI consultation of EU exporters, 25 June 2007 (SPEECH/07/415-25/06/2007)
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Comments and Analysis At a time of heightened global price volatility and periodic market disruptions (e.g. the Russian import ban) the EC’s spirited defence of the use of quantitative controls on sensitive agricultural products is understandable, given the policy priority accorded the protection of the EU’s underlying agricultural base. What is less understandable, given the EU’s recognition of the sensitivity of the agro-food sector, is the EU’s approach to the use of non-tariff trade policy measures by African governments under the recently concluded Economic Partnership Agreements.
In trade agreement after trade agreement with sub-Saharan African countries the EC has demanded the inclusion of a provisions which call for the immediate abolition of the use of quantitative restrictions on imports from the EU from the date of entry into force of the various economic partnership agreements. These provisions on the ‘Prohibition of Quantitative Restrictions’ is just one of a number of provisions included in the various EPAs which seek to restrict or prevent the use of non-tariff trade policy tools by African governments.
For the EC the conclusion of the various EPAs, simply provides the legal starting point for the pursuit of the systematic removal of all barriers to EU agro-food exports to African markets. In this context how these EPA provisions are interpreted and applied in practice in the coming months and years could well be critical to the overall effects of EPA implementation on African agro-food sector development. Indeed, in terms of African agro-food sector development is this likely to be a critical policy battleground in the coming years.
This is particularly important since a review of WTO Trade Policy Reviews conducted since October 2010, reveals no less than 27 African governments make use of non-tariff trade policy tools (including quantitative restrictions) to manage trade in no less than 11 sensitive agro-food sector. The use of these measures often forms as an integral part of efforts to promote more integrated agro-food sector development.
There would appear to be a major inconsistency in an EU policy which accepts as legitimate the systematic protection of EU agriculture through the use of such measures as TRQs (particularly in trade with major agro-food exporting nations), while prohibiting the use of similar such tools by African governments in agro-food sector trade with their major trading partner the EU.
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Key words: EPAs, TRQs PCD, sensitive sectors Area for Posting: ‘EU Trade Policy’
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[1]See DRAFT JOINT TEXT (February 2014)
[2] See November 2008 text