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

Nominally the CTEO will play a role in:

· Effectively ensuring 3^rd country governments live up to the commitments entered into in regard to

o   ‘opening their markets to EU exports and investments;’

o   ‘respecting other trade commitments that benefit EU operators;’

o   respecting ‘workers’ rights;’

o   ‘tackling climate change, and

o   protecting ‘the environment’.

· ‘Managing a single-entry point where EU companies, trade organisations or non-governmental organisations can submit complaints:

o   on barriers to trade in non-EU countries, and;

o   about non-EU countries not meeting the commitments they have made in trade
agreements’ (e.g. on workers’ rights, tackling climate change, and the
environment).

· ‘Managing Trade Barrier Regulation investigations and initiating investigations where the Commission requires more information on potential barriers to trade or the non-respect of other commitments.’

· ‘Overseeing the EU’s Trade Defence work.’

· ‘Coordinating dispute settlement proceedings between the EU and non-EU countries’

·  ‘Ensuring the availability of effective dispute settlement rules.’

·  ‘Ensuring the EU has an effective arsenal to enforce EU rights under international agreements.’

· ‘Overseeing Commission initiatives to make it easier for EU firms to reap the benefits created by the EU’s trade agreements’ (2).

Many ACP countries in one sector or another utilise some form of quantitative controls on imports to create the market space for the development of local agri-food sector production. This is especially important given the role agri-food sectors play in employment creation and rural development in many ACP countries.

The sectors where such measures are used range from onion production in West Africa, to poultry meat production in Central Africa, to horticulture, dairy, cereals and poultry meat production in Southern Africa and sugar production in East Africa. While the nature of the quantitative restrictions varies from country to country and even product to product, the hard reality faced is that should the EU choose to enforce EPA commitments on the ‘prohibition of quantitative restrictions’, then the future use of these trade policy measures could be brought into question and would need to be phased out.

Similarly, most notably in the Caribbean, regional trade preferences are extended in major agri-food sectors to try and stimulate regional production and foster the development of regional input supply chains. Were EPA commitments related to ‘national treatment’ rigorously enforced, then this core regional integration policy plank in the Caribbean could be brought into question.

Against this background the question arises: how will the EC Chief Trade Enforcement Officer seek to use his new powers?

There are concerns amongst European civil society actors the new CTEO is looking for obvious cases where immediate benefits can be gained from the more rigorous enforcement of existing trade agreement commitments. Enforcement of commitments entered into under Economic Partnership Agreements by ACP governments, is seen as offering scope for easy ‘wins’, given the limited ability of these countries to engage in such legal disputes and their negligible capacity for trade retaliation should the EU choose to impose counter measures.

It is in this context, that the EU’s ongoing dispute with South Africa over safeguard measures taken in the poultry sector, is of ongoing concern (see companion epamonitoring.net article,  ‘EU Formally Challenges Application of SACU Safeguard Duties in the Poultry Sector’, 27 June 2019.

If the UK departs from the EU without an alternative trade arrangement being in place, pressure from the EU poultry industry (5) for decisive EU action to remove both South Africa safeguard duties and Avian Influenza linked phytosanitary import restrictions are only likely to increase.

Currently some 1.2 million tonne of poultry meat is traded annually between the EU and the UK. Some 75% of this trade in from the EU to the UK. A no-deal UK departure from the EU customs union and single market could potentially see this  trade grind to a halt, in the face of both new MFN tariffs and non-tariff trade requirements (see companion epamonitoring.net article  ‘EU Figure Highlights Importance of UK Market to EU27 Poultry Sector’, 7 July 2020).

In its 2020 report the European Poultry Association, AVEC, called for the EU’s new CTEO to ‘be given the resources and power needed to achieve his remit’, with reference being made to the need for a tougher approach to ‘trade relations with third countries to ensure that trade follows the agreed rules in free trade agreements’. It called for breaches to the rules to ‘have direct and immediate economic consequences’ (6).  These references were clearly aimed at South Africa in the context of the ongoing poultry sector trade dispute.

This dispute however needs to be seen in light of the efforts launched over the past 7 years to return the South African poultry sector to a path of sustained growth and structural development, linked to the growing demand for low priced poultry meat in South Africa (see companion epamonitoring.net articles ‘South Africa’s Poultry Sector on the Road to Recovery as Stricter Trade Regime Applied’, 3 December 2020).

There would, however, be a certain irony in any focus by the new CTEO on the poultry sector. In the course of 2020, in response to the trade and market effects of the Covid-19 pandemic, the European Poultry Association, AVEC, called on the EC ‘to use its market management power to adjust import levels from third countries’ (6). These ‘market management’ powers relate to the administration of the tariff rate quotas (a form of quantitative restriction) which the EU uses to regulate access to the EU poultry market. Significantly, between January and September 2020 EU imports of poultry meat were down almost 14% compared to the corresponding period in 2019 (7).