UK NGOs are critical of proposals to transpose current EU reciprocal trade arrangements into bilateral UK trade deals with ACP countries. UK NGOs favour a new ‘gold standard’ of unilateral non-reciprocal trade preferences which extends beyond current such arrangements. However it is difficult to see how such non-reciprocal trade arrangements can be reconciled with the UK governments’ over-riding preoccupation with maintaining and expanding access for UK exporters to non-EU markets via bilateral UK free trade agreements
The emphasis being placed by the UK government on concluding free trade area agreements with developing countries, including through transposing the existing EU EPA arrangements into new bilateral trade deals with the UK, has been criticised by Fairtrade Foundations in its written submission to the House of Commons International Trade Committee inquiry into ‘UK trade options beyond 2019’. (1)
The Fairtrade Foundation highlighted how many developing countries had resisted concluding economic partnership agreements with the EU and only finally did so under the threat of loss of a preferential access to the EU market. It concluded ‘attempting to copy EPAs would be a missed opportunity to improve on EU policies’, which could prove ‘politically problematic for the government’ since ‘negotiation of the EPAs attracted significant levels of public protest’. In this context it was argued ‘there is no guarantee that the relevant contracting parties to existing EPAs would agree to the grandfathering of these agreements without further negotiation’. (1)
Instead the Fairtrade Foundation called on the UK government to establish a unilateral ‘preference scheme, offering non-reciprocal, tariff free market access to LDCs and other economically vulnerable countries’, thereby establishing a ‘gold standard in development friendly trade policy’.
Significantly the Fairtrade Foundation written submission it highlighted how already uncertainty over future access to the UK market was ‘directly impacting the sourcing and supply chain management decisions of businesses in Britain who are uncertain of the conditions under which imports will enter the UK in the future’. (1)
The call for a ‘gold standard in development friendly trade policy’ has been endorsed by a coalition of UK development NGOs (CAFOD, Christian Aid, Fairtrade Foundation, Oxfam, Tearfund, Traidcraft), who in an advocacy brief highlighted how the failure of the UK government to put in place new measures guaranteeing current preferential access to the UK market would cost producers from the poorest countries ‘around £1 billion in extra taxes’. (2)
A call has also been made to the UK government to ‘make sure free trade agreements with wealthier countries don’t undermine developing country competitors’. (3)
(1) Fairtrade Foundation, ‘Written Evidence submitted by the Fairtrade Foundation (UKT0042)
(2) CAFOD, Christian Aid, Fairtrade Foundation, Oxfam, Tearfund, Traidcraft, ‘Brexit: Make it work for everyone’
(3) CAFOD, Christian Aid, Fairtrade Foundation, Oxfam, Tearfund, Traidcraft, ‘Post-Brexit trade and developing countries: can the UK set the Gold Standards in development friendly trade policy?
|Comment and Analysis
The fact that uncertainty over future access to the UK market is already ‘directly impacting the sourcing and supply chain management decisions of businesses in Britain’, highlights the need for UK governmental assurances on the specific regulatory modalities to be set in place to guarantee uninterrupted access to the UK market under current terms and conditions from day 1 of the UKs’ departure from the EU. The UK governments repeated assertion of its unswerving commitment to free trade and the conclusion of free trade agreements, does not provide the necessary assurance, given the enormous capacity constraints which will be faced in the UK administration in negotiating new bilateral FTAs (see companion article ‘Capacity constraints and complexities of ‘grandfathering’ highlighted by Parliament Report’).Until firm UK government assurances are in place that no ACP country will face worse terms of access to the UK market the day after the UK’s formal departure from the EU than they currently enjoy, UK importers will need to factor-in the possibility of a reintroduction of MFN duties in the commercial supply contracts they sign.
In terms of the Fairtrade Foundations’ alternative proposal for a more extensive UK unilateral, non-reciprocal scheme of preferences, it is unclear how Caribbean and Pacific ACP EPA beneficiaries, almost all of which are middle income countries, would fit into such a scheme.
However a broader concern with the UK NGO proposal also needs to be addressed, namely its inconsistency with the UK government‘s current emphasis on securing preferential access for UK exporters to third country markets beyond the EU. It is difficult to see how a new ‘gold standard in development friendly trade policy’, would fit with the UK governments’ over-riding preoccupation with maintaining and expanding preferential access for UK exporters to non-EU markets.
|Key words: BREXIT,
Area for Posting: BREXIT, Southern Africa, East Africa, West Africa, Caribbean EPA, Pacific EPA, EPA General