Category: Eastern African

Overview of the EC Trade Policy Review and the Impact of EU Behind Border Concerns The EU Trade Policy Review Part 1

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Summary
The EC sets out 3 core trade policy objectives: Supporting the recovery and fundamental transformation of the EU economy in line with its green and digital objectives’; ‘Increasing the EU’s capacity to pursue its interests and enforce its rights, including autonomously where needed’; ‘Shaping global rules for a more sustainable and fairer globalisation. Difficult operational choices will be faced in reconciling these three objectives, with this revolving around the question of who pays for the costs of more sustainable and socially responsible production processes, which at the same time delivers decent and more sustainable livelihoods for developing country producers? Care will need to be taken in ensuring the pursuit of EU interests and enforcement of EU rights does not become the dominant pillar of the EU’s new trade policy. Read more “Overview of the EC Trade Policy Review and the Impact of EU Behind Border Concerns The EU Trade Policy Review Part 1”

COLEACP Updated Brexit Impact Assessment Posted

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Summary
The comprehensive nature of COLEACP’s Brexit assessment makes it a useful starting point for all ACP agri-food exporters in their efforts to get to grips with the new trade challenges thrown up by the culmination of the Brexit process. Its analysis of the short-term transitional and long-term structural challenges faced, also raises policy issues which now need to be addressed if disruptions to ACP supply chains which cross the new EU/UK customs and regulatory border are to be minimised. This sets an agenda for concerted ACP action, drawing in stakeholders from the multiplicity of sectors adversely affected by the new trade realities faced. While in the horticulture sector these issues primarily affect ACP exporters using triangular supply chains, in other sectors ACP exporters directly serving EU and UK markets could also be affected. This is particularly the case where imports are used in manufactured food and drink products and where the use of domestically produced alternatives (of either EU or UK origin) could avert any rules of origin complications (e.g., in the use of imported sugar in food and drink products destined for export). Read more “COLEACP Updated Brexit Impact Assessment Posted”

Will ACP Producers Currently Exporting to Irish Markets Via the UK or Using the UK ‘Land Bridge’ Take Advantage of Expanded Mainland EU to Republic of Ireland Ferry Services

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Summary
There has been a 3-fold expansion of direct ferry services from the Republic of Ireland to France in 2021, as well as an expansion of direct services to Dutch and Belgian ports. Using these routes to serve Irish markets could enable ACP exporters traditionally using the UK ‘land bridge’ or serving Irish markets via the UK to sidestep export pre-notification requirements further phytosanitary certification requirements, further phytosanitary inspections, and major rules of origin complications, which result in a loss of duty-free access for onward traded goods, while allowing a continuation of low-cost ‘Groupage’ cargo haulage practices. The imbalance in Irish truck-based exports compared to imports could open up opportunities for securing low-cost freight services, which balance the more expensive ferry costs along these routes. However, this will require a process of ‘match making’ between ACP exporters and Irish hauliers, where potentially Irish government support could play a role. Read more “Will ACP Producers Currently Exporting to Irish Markets Via the UK or Using the UK ‘Land Bridge’ Take Advantage of Expanded Mainland EU to Republic of Ireland Ferry Services”

Brexit Bureaucracy Places Brake on Commercial Flexibility for ACP Horticultural Exports

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Summary
Pre-export notification requirements, the need to re-issue phytosanitary certificates, problems in delivering ‘groupage’ cargoes, port clearance delays and rising road haulage charges are all undermining the commercial flexibility required for ACP exporters to exploit emerging market opportunities, where this involves the movement of goods across EU/UK borders. This is depressing export earnings, with this being a particular problem for smaller scale ACP exporters. In addition, new rules of origin complication which lead to standard MFN import tariffs being applied if goods delivered along triangular supply chains are not shipped under customs supervision, is requiring a fundamental rethink of the routes to market being used. A policy response, involving modification of the ‘Direct Transport’ provisions of the rules of origin applied under ACP-UK trade agreements and ACP-EU trade agreements is urgently needed, if smaller scale exporters shipping along triangular supply chains are not to be driven of UK and Irish markets. Read more “Brexit Bureaucracy Places Brake on Commercial Flexibility for ACP Horticultural Exports”

UK Deferment of  Implementation of Phase 2 and Phase 3 UK/EU Border Controls Leave Problems Faced By ACP Triangular Supply Chain Exporters Unaddressed

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Summary
On 11 March 2021, the UK government announced the deferment until 2022 of its planned phase 2 and phase 3 controls on goods crossing an EU/UK border.  This has reduced concerns over potential disruptions of UK imports of fresh produce in the coming months and provides a 9-month breathing space for the UK authorities to set in place border control infrastructure and services which are ‘fit for purpose’. This deferment benefits EU producers, but largely leaves ACP exporters serving UK markets along triangular supply chains unaffected. ACP exporters will still face the dilemma of choosing between entering the EU customs union so as to benefit from the light UK import controls applied to EU products and losing ‘originating status and facing MFN tariffs, which is the consequence of leaving customs supervised transit arrangements. Clearly there is an urgent need to address specific ACP triangular supply chain issues if the functioning of many of these ACP triangular supply chains are not to be fundamentally undermined. Read more “UK Deferment of  Implementation of Phase 2 and Phase 3 UK/EU Border Controls Leave Problems Faced By ACP Triangular Supply Chain Exporters Unaddressed”

Continued Disruption of African Dairy Markets Likely as Continued EU Export Growth Projected Amid Changing Pattern of Milk Powder Exports

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Source
The EU is projected to continue to dominate the global trade in dairy products, with EU milk production growth slowing down but continuing. There is a growing trend towards increased EU exports of low priced ‘fat filled milk powders’, in the face of growing competition on milk powder markets from Latin American exporters. This is increasing the importance of negotiated EU tariff and non-tariff preferences on sub-Saharan African markets. There is growing concern over the devastating impact of increased ‘fat filled milk powder’ imports on local milk supply chains in West Africa. Maintaining the policy space for managed trade in milk powders would appear to be an essential part of sustainable strategies to promote the development of local milk production in the face of surging demand for dairy products in sub-Saharan Africa. Read more “Continued Disruption of African Dairy Markets Likely as Continued EU Export Growth Projected Amid Changing Pattern of Milk Powder Exports”

EU Sugar Projections to 2030 Suggest Less Room on EU27 Market for ACP Sugar Exports

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Summary
Expanding EU sugar production and contracting EU sugar consumption up to 2030 will see EU sugar imports decline (by -300,000 tonnes) and EU sugar exports expand (+700,000 tonnes) compared to 2020. This will increase competition for ACP sugar exports on the EU27 market, in a context where heightened health consciousness and active campaigning is seeing pressure to reduce ‘hidden sugars’ in food and drink products. Further pressures to move away from the use of cane sugar in high sugar content food and drink products will arise from the rules of origin agreed under the EU/UK trade agreement. ACP sugar exporters will need to better understand the market components their exports serve and how they will be impacted by evolving trends. The pressures on ACP sugar exporters could be eased by policy interventions designed to secure automatic cumulation under rules of origin where duty free/quota free access is enjoyed to both the EU and UK markets. Read more “EU Sugar Projections to 2030 Suggest Less Room on EU27 Market for ACP Sugar Exports”

East African Fresh Product Export Supply Chains Disrupted by Brexit Related Changes in Border Clearance Requirement

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Summary
The impact of new EU/UK border clearance requirements on the costs faced by East African fresh produce exporters serving the UK market via the EU is becoming apparent. In some cases, this is severely impacting on export volumes destined for the UK market shipped along triangular supply chains. The dilemma is faced of whether to ship under customs supervision and face inspection delays at the UK border, or clear customs and SPS inspections in the EU and risk losing ‘originating’ status and hence facing MFN tariffs when entering the UK. This dilemma is faced by a multiplicity of East African exporters who use triangular supply chains. LDC based exporters are particularly disadvantaged, given the absence of clear structure for dialogue with the UK on resolving customs and trade facilitation issues. Read more “East African Fresh Product Export Supply Chains Disrupted by Brexit Related Changes in Border Clearance Requirement”

Disruptions Along EU UK Supply Routes Less Than Expected but Onward Haulage Costs Rising and Longer Time Required For Orders to Be Fulfilled

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Summary
Road traffic disruptions along EU/UK ‘RoRo’ routes have been less than feared. This is largely due to a sharp drop in traffic flow along these routes. However, the changes to EU/UK border arrangements have seen an increase in road haulage costs along these routes. Some of these causes of cost increases are transitional and will decline by 2022. Other causes of cost increases are structural and could undermine the commercial viability of the use of triangular supply chains currently used to get ACP products to market. This will be a particular problem for lower value fresh produce and smaller scale ACP exporters.  Individual supply chains will need to assess the long-term commercial implications of rising road haulage costs along EU-UK ‘RoRo’ routes. Policy initiatives to remove the rules of origin complications along triangular supply chains for ACP exporters whose products enjoy duty-free/quota-free access to both the UK and EU market are possible.  Equally it should be possible on risk assessment ground to waive any need for phytosanitary import controls on ACP products which have recently been subject to such controls on entry to the EU when onward shipped to the UK. However, under current circumstances this will need to be negotiated bilaterally with the UK.  Such initiatives would ease pressures on road haulage operators and incentivise the resumption of more normal haulage arrangements for ACP products shipped to the UK via the EU Read more “Disruptions Along EU UK Supply Routes Less Than Expected but Onward Haulage Costs Rising and Longer Time Required For Orders to Be Fulfilled”

What Does the New EU UK Trade Agreement Mean for ACP Sugar Exporters?

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Summary
The new EU/UK trade agreement includes new rules of origin requirements, which in the absence of ‘diagonal cumulation’ arrangements, could pose problems for some ACP raw sugar sector supply chains, including those serving food and drink manufacturing industries. Given the absence of ‘diagonal cumulation’ provisions in the EU/UK trade agreement a significant restructuring of the affected supply chains will be needed, in a context where demand for ACP sugar is shrinking.  This could result in all but the largest and most efficient ACP sugar exporters being driven off UK and even some E27 markets. There is potentially some scope for addressing the problems created by the absence of EU/UK ‘diagonal cumulation’ arrangements through the inclusion of specific provisions in enhanced ‘rolled over’ UK trade agreements and even existing EU agreements, should the EU come around to considering such arrangements.  However, this will require a sustained lobbying effort on the part of the governments of the affected ACP countries and allies in other sectors facing similar ‘diagonal cumulation’ constraints on the functioning of triangular supply chains. Read more “What Does the New EU UK Trade Agreement Mean for ACP Sugar Exporters?”