Summary
The early introduction of ‘complex and lengthy pre-notifications, certificates and inspections’ for living plants and cutting crossing from the EU to the UK is impacting on the EU/UK trade in such products. Currently it is unclear what knock-on effects this is having on ACP exports to the EU, given the large proportion of imports which originate in AC countries and the central role the Netherlands plays in the import and re-export trade. Given the impasse in EU/UK trade relations around the Northern Ireland Protocol, the early conclusion of a substantive EU/UK ^phytosanitary agreement is unlikely. The scope for shifting over to ACP direct exports to the UK meanwhile is complicated by the commercial consequences of the UK’s Covid-19 linked ‘red-list’ travel restrictions which are raising air freight costs from East Africa to the UK.
In the categories bulbs, tubers etc (0601) other live plants (0602), foliage and branches (0604), the most important category for ACP exports is ‘Other live plants (including their roots), cuttings and slips’ (0602), with the value of ACP exports reaching €119.6 million in 2019, up from €102.8 million in 2015 (+16.3%). In 2019 ACP countries accounted for 33% of the value of EU28 imports in this product category (1).
While 17 ACP countries are involved in this trade in live plants and cuttings, the trade is dominated by East African suppliers, Kenya, Uganda, Ethiopia, and Tanzania, followed much further behind by South Africa. Collectively these 5 ACP exporters accounted for 32% of the value of EU28 imports in 2019 (1).
Main ACP Exporters of ‘Other live plants and cuttings (0602)’ to the EU28
| 2015 | 2016 | 2017 | 2018 | 2019 | % Change 2015-19 | |
| Total EU28 Imports | 292,521,479 | 294,599,888 | 311,086,182 | 337,007,243 | 364,761,821 | +24.7% |
| Kenya | 48,993,750 | 40,770,176 | 43,232,243 | 45,625,414 | 48,706,506 | -0.6% |
| Uganda | 21,722,217 | 21,075,719 | 23,750,811 | 24,465,824 | 25,667,860 | +18.2% |
| Ethiopia | 16,956,390 | 18,283,029 | 19,809,170 | 20,942,719 | 20,706,961 | +22.1% |
| Tanzania | 10,742,658 | 13,724,983 | 14,160,528 | 15,622,706 | 19,916,178 | +85.4% |
| South Africa | 2,939,009 | 2,683,532 | 3,127,687 | 2,795,035 | 1,911,728 | -35.0% |
| Sub-Total | 101,354,024 | 96,537,439 | 104,080,439 | 110,451,698 | 116,909,233 | +15.3% |
| % Total EU Imports | 34.6% | 32.8% | 33.5% | 32.8% | 32.1% |
EC, Market Access Data Base, https://trade.ec.europa.eu/access-to-markets/en/statistics?includeUK=true
Direct exports to the UK are marginal to this trade in live plants and cuttings, with the Netherlands and Belgium, accounting for 83% of total EU28 imports from these 5 countries, with the Netherlands dominating (1).
This needs to be seen in a context where in 2019 the UK imported €8,405,629 from non-EU sources, some 7.2% of total EU28 imports, while importing €703,789,125 from EU27 member states, with fully €522,474,476 some 74% coming from the Netherlands and a further 6% from Belgium. While many of these UK live plants and cuttings imports will have been raised in the Netherlands and Belgium, there is also a substantial onward trade in re-exported live plants and cuttings to the UK (2).
The export trade in live plants and cuttings to the EU27 proved surprisingly resilient in 2020, despite Covid-19 disruptions with the value of exports from the 5 main ACP suppliers falling only 1.9% (from €116,088,264 to €113,898,813), despite overall EU27 imports in this category falling 5.1% (from €356,356,192 to €338,115,992) (2).
The trade in live plants and cuttings (0602) is thus amongst the top products impacted by the Brexit related complications along EU to UK triangular supply chains.
While this onward trade to the UK was straight forward while the UK was part of the common EU phytosanitary regulatory regime, press reports indicate the absence of a phytosanitary agreement between the EU and UK is proving disruptive to the EU/UK trade in live plants and cuttings.
According to the Horticultural Trade Association (HTA) 78% of plant traders claim ‘a negative impact due to excessive import restrictions imposed by the UK Government after Brexit’, with annual extra costs generated by the Brexit process estimated at £25-30 million, with small businesses bearing the brunt’ (3). This represents between 4.2% and 5% of the reported value of EU exports to the UK of live plants and cuttings in 2020 (2).
Main EU28 Destinations of ‘Other live plants and cuttings (0602)’ to the EU28 2019
| Kenya | Uganda | Ethiopia | Tanzania | South Africa | Sub-Total | % EU28 | |
| EU28 | 48,706,506 | 25,667,860 | 20,706,961 | 19,916,178 | 1,911,728 | 116,909,233 | |
| Netherlands | 36,110,875 | 22,368,544 | 11,116,047 | 19,755,770 | 1,495,557 | 90,846,793 | 77.7% |
| Germany | 5,455,373 | 1,559,473 | 1,582,700 | 0 | 16,477 | 8,613,023 | 7.4% |
| Belgium | 230,535 | 0 | 5,875,232 | 0 | 57,159 | 6,162,926 | 5.3% |
| Italy | 3,030,109 | 845,827 | 800,942 | 0 | 95,177 | 4,772,055 | 4.1% |
| Spain | 1,279,664 | 470,946 | 823,368 | 149,862 | 109,157 | 2,832,997 | 2.4% |
| France | 844,434 | 105,469 | 481,141 | 1,955 | 93,343 | 1,526,342 | 1.3% |
| UK | 765,101 | 0 | 19,220 | 0 | 36,647 | 820,969 | 0.7% |
EC, Market Access Data Base, https://trade.ec.europa.eu/access-to-markets/en/statistics?includeUK=true
These additional costs arise from ‘spiralling staff hours to administer the paper mountain’, alongside ‘inspection fees, phytosanitary certificates’ (3) and other logistical cost increases arising from the knock-on effects of the Brexit process. According to the HTA, ‘new trading arrangements are limiting product ranges and …. adding over a pound to a £9.99 plant simply to cover admin.’ Dutch plant traders are now reportedly thinking twice before doing business with the UK (3).
According to the HTA the pre-existing trade is being obstructed by ‘the increase in time and costs for businesses in importing plants and trees into the UK.’ For example, from the ‘1 June 2021 a substantial fee was added to import inspections, while in January controls were imposed on plant border movement, adding layers of complex and lengthy pre-notifications, certificates and inspections.’ This is despite checks and fees not being required on goods crossing from the EU to the UK for most other sectors until 2022 (3).
The chair of the HTA, James Barnes maintains while being wholly supportive of a ‘robust biosecurity regime’, the UK government needs a ‘better balance on the regulations and restrictions, which are limiting responsible trade.’ Against this background the HTA has called for an agreement with the EU which ‘will remove current barriers and help mitigate the rising costs that are hampering trade’ (3).
| Comments and Analysis It is far from clear what the impact of the new post-Brexit cost increasing requirements on EU/UK cross border trade in live plants and cuttings is on ACP exporters who previously shipped such products via the Netherlands and Belgium to the UK. What is clear is that with the 5 main ACP suppliers accounting for 41% of Dutch imports of live plants and cuttings (0602) in 2019, it will largely be these ACP countries which are adversely impacted by the new challenges faced in re-exporting live plants and cuttings from the EU to the UK While this trade is not impacted by the rules of origin/MFN tariff issue, given the UK MFN tariff on such products is zero, it does face VAT reporting complications, given some of these products face up to 20% VAT. A detailed analysis of the impact of the new EU/UK trade barriers on the ACP re-export trade in live plants and cuttings is needed. Unfortunately, it is unclear what kind of policy response could be set in place to address adverse effects, beyond the HTA’s call for an agreement with the EU which ‘will remove current barriers and help mitigate the rising costs that are hampering trade.’ So long as issues around the implementation of the Northern Ireland Protocol remain unresolved, there is little prospect of any substantive progress on a meaningful EU/UK phytosanitary agreement. Any resolution of Northern Ireland Protocol issues in EU/UK trade relations has simply been pushed down the road by the late June 2021 EU/UK stop gap agreement, deferring a decision on the implementation of further controls on the UK to Northern Ireland trade until October 2021, at the earliest. The only business level response to increased costs faced is to develop direct exports to the UK. However, outside of Kenya, the main ACP exporters of live plants and cuttings have little experience of shipping direct to the UK. Tanzania and Uganda simply do not export directly to the UK, while less than 0.1% of Ethiopian exports are shipped directly to the UK. South Africa, for its part ships some 1.9% while Kenya ships only 1.6% of total exports to the EU28 direct to the UK. For East African exporters, the prospect shifting over to direct exports to the UK has been further complicated by UK ‘red list’ passenger travel restrictions, which have seen a halting of direct flights to the UK from Kenya and Ethiopia and Gulf trans-shipment hub airports. This has seen an increase in air freight costs (see companion epamonitoring.net article, ‘East African Air Freighted Horticulture and Floriculture Exports to UK facing Devastation Given UK ‘Red List’ Travel Restrictions’, 13 April 2021). |
Sources:
(1) EC Market Access Data Base (including UK)
https://trade.ec.europa.eu/access-to-markets/en/statistics?includeUK=true
(2) EC Market Access Data Base (excluding UK)
https://trade.ec.europa.eu/access-to-markets/en/statistics
(3) HTA, ‘Plant health agreement could turn £multi-billion horticulture industry into a Brexit success story, claims HTA’,
https://hta.org.uk/news-current-issues/news-current/news/plant-health-agreement-brexit-success-story.html