Summary
The expansion of EU sugar production in addition to reducing the volume and value of ACP sugar exports has also undermined the profitability of EU sugar beet processing companies, with major operators such as Suedzucker looking to shut some processing plants in response to low EU sugar prices. In 2017/2018 regional EU sugar price trends in part correlated with trends in sugar production, with price falls being most dramatic in areas where the production increase was greatest. Meanwhile voluntary coupled support has held back the geographical redistribution of EU sugar production. Some ACP exporters remain dependent on the UK market while others have diversified, targeting sugar deficit regions of the EU where sugar prices have held up better. Longer term trends in EU sugar consumption do not bode well for traditional ACP sugar exporters. Brexit uncertainties will need to be taken on-board in the marketing decisions of ACP sugar exporters in the 2019/20 marketing year, with various Brexit scenarios being explored and export markets to be targeted identified accordingly. Read more “EU Production Growth Impacts on Both Profitability of EU Sugar Companies and ACP exports to the EU in 2018”
Category: Caribbean
ACP Livestock Sectors and the Collapse of Cross Party Talks to Resolve the Brexit Impasse
Summary
The breakdown of cross party discussions on a compromise to break the Parliamentary impasse on ratification of the EU/UK Withdrawal Agreement is seeing renewed efforts to remove Prime Minister May from office. There are concerns this is increasing the prospect of a ‘no-deal’ Brexit. This would seriously impact on EU27/UK trade in livestock products. The resulting EU/UK trade displacement could lead to import surges which could disrupt ACP markets and undermine the position of local livestock producers in ACP countries targeted by EU/UK exporters. Actual effects will need to be assessed country by country and product by product. ACP governments in countries where livestock based agro-food industries are under development should review the safeguard mechanisms they have available to protect local livestock producers from the trade displacement effects of a ‘no-deal’ Brexit. ACP beef, dairy and poultry companies and producers associations should review their marketing strategies and develop contingency plans to deal with the commercial consequences of the trade displacement effects of a ‘no-deal’ Brexit. Read more “ACP Livestock Sectors and the Collapse of Cross Party Talks to Resolve the Brexit Impasse”
What Issues Arise in Relations with Developing Countries From the EU’s 2020 CAP Reform Proposals?
Summary
While the paper from Professor Mathew’s paper reviews the possible effects of specific CAP reform proposals, these cannot be assessed in isolation from the wider EU CAP related policies. This includes EU agricultural trade policies and EU SPS and food safety policies. There are inherent tensions between the quest by EU agro-food companies for new markets and African aspirations for the structural development of local agro-food sectors. Reconciling this tension in a development friendly manner will be a key challenge in addressing policy coherence issues which arise as a result of the EU’s Common Agricultural policy and associated supporting policy measures. Any attempt to get to grips with this issue will require engagement at the country and product specific level and will require full respect for the right of ACP governments’ to determine trade policy measures in all sovereignty on the basis of national structural development interests. This will de facto require the EU to respect the ‘right to development’ of ACP countries by subordinating the interpretation and application of trade agreement commitments to the structural development interests of ACP countries, as defined by the governments and concerned stakeholders in ACP countries Read more “What Issues Arise in Relations with Developing Countries From the EU’s 2020 CAP Reform Proposals?”
Stricter Risk Assessments under New EU Plant Health Regulation Could Hinder ACP Exports
Summary
The EU’s list of high risk plants for which risk assessment and SPS certification will be a pre-requisite for trade to take place has been published alongside the procedures to be followed for securing SPS certification. These procedures are extensive and demanding. While few ACP products are affected by the current list, this list could be extended, with potentially a wide range of ACP exporters being affected. The length of notification before new requirements enter into force will be an important issue in trade with the EU in potentially affected products. Given the specific climatic conditions in the UK it is unclear whether under a no-deal Brexit scenario the UK would feel obliged to fully enforce all aspects of the EU’s new plant health regulation once its enters into legal effect in the EU in December 2019. Given the potential trade disruptions which could arise from the new EU plant health regulation it would appear important to ascertain from the UK government its future SPS related import control policy in areas of export interest to ACP countries. The reality is that given the agro-climatic conditions in the UK a range of EU regulatory requirements may simply be un-necessary under a purely nationally defined SPS control regime (e.g. strict CBS controls on citrus fruit imports). This issue should form an important part of any Continuity Agreement negotiations with the UK, particularly under the proposed “Annex of Concerns” approach. Read more “Stricter Risk Assessments under New EU Plant Health Regulation Could Hinder ACP Exports”
New EU Plant Health Regulation on Non-European Fruit Fly Could Put Squeeze on Smaller ACP Mango Exporters
Summary
In the mango sector stricter EU phytosanitary controls on non-European fruit fly (Tephritidae) could halt the strong growth in ACP mango exports to the EU market which has been underway since 2008. Stricter EU controls could make it commercially non-viable for smaller scale ACP exporters to continue to enjoy entry to the EU market. In this context the extent to which the UK will apply evolving EU phytosanitary controls under a no-deal Brexit scenario could take on some significance for smaller scale ACP mango exporters. Put simply risk assessments based solely on agro-climatic conditions in the UK may come to quite different conclusions than risk assessments based on the diverse agro-climatic conditions across all EU27 member states. In this context if the UK were to design phytosanitary controls based solely on the threat to agriculture and human health in the UK these may prove to be far less strict than the controls now being introduced by the EU. This is an issue which could usefully be taken up in ongoing Continuity Agreement negotiations with the UK, particularly in the context of the “Annex of Concerns” approach now being canvassed as a mean of ensure forward looking trade arrangements with the UK are set in place. Trade arrangements which take into account the changed economic realities and commercial possibilities which the UK’s withdrawal from the EU customs union and single market will or could bring about. Read more “New EU Plant Health Regulation on Non-European Fruit Fly Could Put Squeeze on Smaller ACP Mango Exporters”
UK Procedures for SPS Inspections of Plant and Plant Products under a No-Deal Brexit
Summary
If the EU no longer carries out necessary phytosanitary checks on plants and plant products imported into the UK via EU27 member states, the UK will need to apply standard 3rd country phytosanitary controls to ACP plant products exported to the UK via a EU27 member state. The application of standard 3rd country phytosanitary controls along ACP triangular supply chains could prove disruptive given the UK government’s current planned system of controls. These controls are seen as commercially non-viable by operators involve in current triangular supply chain arrangements. There is therefore an urgent need for ACP governments whose exporters are involved in triangular supply chains involving the affected products to secure from the EU authorities a firm commitment that necessary plant health checks on products destined for the UK market will continue to be carried out in the EU27. Read more “UK Procedures for SPS Inspections of Plant and Plant Products under a No-Deal Brexit”
How Would ACP Least Developed Countries Be Impacted by a 12th April No Deal Brexit?
Summary
The ending of the two year notification period set out under Article 50 of the EU Treaty alongside the House of Commons rejection of the Withdrawal Agreement for a 3rd time, leaves the Brexit process on borrowed time. The UK government will now have to submit an alternative way forward in the Brexit process if a no deal Brexit is to be avoided on the 12th April 2019. While this may include a longer extension of the Article 50 period beyond the 2 weeks the EU Council has currently granted, the prospect of a no-deal Brexit on 12th April cannot be ruled out. This is despite a huge 240 Parliamentary majority against the UK leaving the EU without a deal. While a no-deal Brexit will not impact on the duty free quota free access which LDCs enjoy to the UK market, where the UK government has committed to rolling over the existing EU preferential system for LDCs as a unilateral UK trade arrangement, a wide variety of non-tariff related issues will also need to be addressed. If these issues are not comprehensively addressed then current trade flows from LDCs could be disrupted in the short term while in the longer term the value of the duty free-quota free access enjoyed could be undermined by changes in the UK’s independent MFN tariff regime. In addition there are a range of UK trade policy issues which need to be addressed if trade with least developed countries is to become a tool for wider poverty focussed sustainable development in LDCs. Most notably in this regard are the rules of origin and SPS control requirements to be applied by the UK to imports from LDCs. Read more “How Would ACP Least Developed Countries Be Impacted by a 12th April No Deal Brexit?”
Which ACP EPA Signatory Countries Would be Most Vulnerable to a 12th April No Deal Brexit?
Summary
With the ending of the two year notification period set out under Article 50 of the EU Treaty and the House of Commons having rejected the Withdrawal Agreement for a 3rd time, the Brexit process is on borrowed time. The UK government will now have to submit an alternative way forward in the Brexit process if a no deal Brexit is to be avoided on the 12th April 2019. While this may include a longer extension of the Article 50 period beyond the 2 weeks the EU Council has currently granted, the prospect of a no-deal Brexit on 12th April cannot be ruled out, despite a huge 240 Parliamentary majority against the UK leaving the EU without a deal. Against this background, after providing an update on the Brexit process in the UK, this article reviews the situation of ACP countries and regions which currently trade with the UK under an EU EPA. Read more “Which ACP EPA Signatory Countries Would be Most Vulnerable to a 12th April No Deal Brexit?”
UK Signs Continuity Agreement with Caribbean ACP Countries
Summary
On 22nd March 2019 the UK government signed a Continuity Agreement with representatives of a number of Caribbean ACP governments. The UK government press release highlighted the benefits of the agreement to Caribbean banana, sugar and rum exporters. While the agreement leaves Caribbean signatories well placed to exploit expanded market opportunities which a no-deal Brexit would give rise to, these benefits could rapidly disappear. The UK government is committed to a wide ranging review of its temporary MFN tariff schedule within 12 months of a no-deal departure from the EU. It is essential for Caribbean Continuity Agreement signatories to ensure existing MFN duties for bananas and sugar remain in place in the medium to long term. Important issues related to the functioning of triangular supply chains and the future of autonomous UK phytosanitary controls linked to UK agro-climatic conditions also need to be addressed. In light of these issues there is a need to attach an “Annex of Concerns” to the newly conclude UK-Caribbean Continuity Agreement. This should set out both areas where the rolled over provisions of the existing EPA can and should be improved to enhance Caribbean exports trade and where additional agreements are needed to preserve continuity of current flows, including triangular trade flows. Read more “UK Signs Continuity Agreement with Caribbean ACP Countries”
Brexit Delayed but No Deal Brexit Still on the Table
Summary
While the UK has sought an extension of the Article 50 process, the EU Council has limited the duration of the extension granted, with this being conditional on approval of the Withdrawal Agreement. Failure of the UK Parliament to approve the Withdrawal Agreement would require an alternative way forward to be identified if the UK was not to leave under a ‘no-deal’ scenario on 12th April. While the UK’s unilateral EBA style trade regime for LDCs and the signing of a ‘Continuity Agreement’ will ensure continuity in tariff treatment for access to the UK market, these agreements will not on their own ensure continuity in trade flows nor continuity of the value of current ACP DFQF access beyond June 2020. For this to be achieved both additional special arrangements will need to be set in place immediately upon the UK’s withdrawal and a multiplicity of supplementary commitments will be required from the UK government if the current value of ACP trade arrangements with the UK is to be preserved and enhanced. Read more “Brexit Delayed but No Deal Brexit Still on the Table”