Summary
The November 2020 NAO report paints a pessimistic picture of the prospects for the effective functioning of the UK/EU border controls in 2021. Developments since November 2020, in regard to the intensifying Covid-19 crisis will not have helped matters. ACP triangular supply chains, which require the movement of goods across an EU/UK border, are likely to be most severely affected. However, serious congestion at UK seaports, with both berthing and unloading delays, could mean direct ACP sea freighted exports could also face delays, with these compounding the system wide challenges UK border control authorities will face in 2021. Read more “Key Challenges Identified in the NAO Brexit Preparedness Report: Implications for the ACP”
Category: Pacific
EU joins UK in rolling over recognition of organic certification throughout 2021
Summary
The EC decision to recognise UK issued organic certification for the whole of 2021, averts the immediate danger of any loss of the commercial benefits of organic sales by ACP exporters on EU27 markets where these sales currently take place on the basis of UK issued organic certification. However, in the absence of an EU/UK mutual recognition on organic certification before the end of 2021, ACP exporters will need to secure both EU and UK organic certification with the additional costs this will entail, if the long term commercial benefits of organic sales are to be secured beyond 2021. The scope for these kinds of parallel ‘unilateral’ EU and UK actions and policy initiatives needs to be fully exploited if the commercial disruptions to ACP triangular supply chains are to be minimised. Read more “EU joins UK in rolling over recognition of organic certification throughout 2021”
Effective Engagement with Expanded Freight Forwarding Sector Seen as Critical to Future UK/EU Border Clearance Operations
Summary
The UK government is urging businesses to use the services of freight forwarders and other customs intermediaries, to facilitate the smooth functioning of post Brexit UK/EU border clearance operations. However, the NAO reports the necessary expansion of the customs intermediate sector has simply not occurred and is unlikely to take place until the second half of 2021 at the earliest. This will see both rising costs and shortages of customs intermediaries, which could slow down border clearance operations. The resulting delivery delays could strip value out of ACP short shelf life product triangular supply chains. Urgent action is needed to secure the services of customs intermediaries for ACP trading operation along triangular supply chains in 2021. Unfortunately, given the surging demand for the services of customs intermediaries such actions may already be too late. Read more “Effective Engagement with Expanded Freight Forwarding Sector Seen as Critical to Future UK/EU Border Clearance Operations”
Strict Management of Sugar ATQ Necessary on Public Health Grounds Given Failure of Voluntary Measures to Reduce UK Consumption of Hidden Sugars
Summary
Voluntary sugar reduction efforts have proved largely ineffective in reducing the use of sugar in food and drink products in the UK, with the DISL in contrast demonstrating how the ‘price’ of sugar can influence the product re-formulation efforts of companies. This suggests the UK’s future sugar trade policy should be managed in a way which carefully balances the supply and demand situation on the UK sugar market, so as to maintain sugar prices and prevent surplus supplies depressing sugar prices. Otherwise, the UK’s sugar trade policy could unnecessarily depress UK sugar prices, to the detriment of wider public health policy objectives. Read more “Strict Management of Sugar ATQ Necessary on Public Health Grounds Given Failure of Voluntary Measures to Reduce UK Consumption of Hidden Sugars”
Report Spells Out Impact of Brexit Scenarios for Food and Beverage Supply Chains
Summary
While even under an EU/UK FTA mutual trade in agri-food products will be adversely affected, under a no-deal outcome these effects would be far more severe. Thus, under an FTA it is estimated UK food exports to the EU would fall 22.5%, while under a no-deal outcome the decline would be 63.2%. The corresponding figures for EU food exports to the UK are 22.6% and 61.7% respectively under an FTA or no-deal scenario. This would have substantial market and wider trade consequences. The knock on effects of the outcome of the EU/UK negotiations will be felt in 5 main areas:
o The effects on ACP triangular supply chains serving the UK via the EU.
o The effects on ACP triangular supply chains serving the EU via the UK.
o A possible further revision of the UK’s MFN tariff schedule under a no-deal outcome.
o New opportunities for increased direct exports to the UK market.
o The diversion of displaced EU/UK exports to targeted ACP market.
ACP agri-food sector enterprises and governments will need to make preparations for dealing with the trade and market consequences which will arise under both an EU/UK FTA and more seriously, the growing prospect of anon-deal outcome to the ongoing negotiations. Read more “Report Spells Out Impact of Brexit Scenarios for Food and Beverage Supply Chains”
Greenpeace Highlights Trade Policy Payback for Tate & Lyle Sugar for Brexit Support
Summary
Greenpeace has drawn a link between Tate & Lyle Sugars support for Brexit an the 260,000 duty free autonomous quota for sugar established by the UK government, suggesting this trade measure, which will solely benefit Tate & Lyle Sugars, is a reward for earlies political support. Greenpeace believes it will encourage imports of environmentally damaging sugar, mainly from Brazil and harm existing ACP/LDC sugar exporters, while NFU and British Sugar believes it will harm domestic UK sugar beet producers. The effects of the ATQ however will be determined by choices made by the UK government, namely whether it conclude an FTA with the EU and whether the ATQ is used solely as a market stabilisation mechanism or becomes an integral part of the supply equation. These two choices will determine whether less efficient ACP sugar exporters are driven out-off the UK market and the income gained by the remaining ACP suppliers. Read more “Greenpeace Highlights Trade Policy Payback for Tate & Lyle Sugar for Brexit Support”
UK Abrogation of Withdrawal Agreement Commitments Heightens Danger of a No Deal UK Departure from the EU Customs Union and Single Market
Summary
The UK governments’ decision to breach substantive provisions of the Northern Ireland Protocol to the jointly agreed Withdrawal Agreement threatens to make ratification of any EU/UK agreement which may still be concluded extremely difficult. It increases the prospect of an acrimonious no-deal UK departure from the EU customs union and single market at the end of 2020. While the scope exists for policy measures to minimise the negative impact of a no deal UK departure on ACP exports, the window of opportunity for taking these necessary measures is rapidly closing. The absence of appropriate policy intervention will leave ACP exporters alone in facing the cost increasing challenges of a no-deal UK departure will generate. Not all current ACP exporters will be able to adjust to these new commercial realities, with all but the largest and best prepared ACP exporters being squeezed out of UK and some EU27 markets. Read more “UK Abrogation of Withdrawal Agreement Commitments Heightens Danger of a No Deal UK Departure from the EU Customs Union and Single Market”
UK Launches Consultation on its 260,000 Tonne Autonomous Tariff Quota for Raw Cane Sugar Imports
Summary
The UK government has launched a public consultation on its new 260,000 tonnes duty free sugar ATQ. A critical issue will be how the UK manages the ATQ. Given the profound uncertainties around the future supply situation on the UK sugar market arising from the unresolved EU/UK trade negotiations a strong case exists for the adoption of a carefully managed application of the sugar ATQ, with its deployment being regulated to prevent both the emergence of supply surpluses or supply deficits on the UK market in the course of 2021. Such an approach would be beneficial to both ACP/LDC sugar exporters and domestic UK sugar beet producers and processors and could also support the attainment of public health policy objectives, if it was used to foster a gradual increase in UK sugar prices. Two complicating factors however exist, namely: the depth of the impending Covid-19 recession in the UK and the serious commercial challenges facing Tate & Lyles Sugar, which desperately needs to expand the capacity utilisation of its Thames refinery in the context of more remunerative market prices for sugar. The question arises as to whether the experience and capacity exists in the hard pressed UK government administration for the nuanced and sophisticated management of the new sugar ATQ. Read more “UK Launches Consultation on its 260,000 Tonne Autonomous Tariff Quota for Raw Cane Sugar Imports”
Preparing for the Impact of a New EU/UK Border on ACP Exports to the EU
Summary
This article seeks to highlight the main areas of impact of the new EU/UK border arrangements as these are likely to affect ACP exporters serving EU27 markets. While this will mainly impact ACP exporters using triangular supply chains, it will also have some effects on direct exports to the EU, mainly via it effects on trade administration documentation requirements, the need for valid authorisations and certifications, customs and taxation rules and the rules of origin requirements under preferential trade agreements. While ACP exporters themselves need to make their own assessments of the impact of the UK’s full withdrawal from the EU and set in process appropriate preparations for the changes which will occur, there is some scope for policy interventions to try and mitigate the adverse impact on ACP supply chains. However, this will require proactive engagement with the EU by the governments of the country’s most seriously impacted by the impending changes. To date there is no evidence the concerned government have yet appreciated the urgency of such policy initiatives. This could leave ACP exporters having to cope alone with further trade disruptions. This is likely to be most severely felt by those ACP exporting countries already suffering most severely because of Covid-19 related trade disruptions. Read more “Preparing for the Impact of a New EU/UK Border on ACP Exports to the EU”
Will ACP Exports to the UK Be Impacted by the New UK-EU Border Control Requirements?
Summary
While the UK government asserts the introduction of UK border controls on goods entering from the EU will leave trade with ACP countries and the rest of the world unaffected, this is not entirely the case. ACP goods entering the UK market via EU27 member states along so-called triangular supply chains, will be most severely affected, though be it in a wide variety of ways. This will depend on:
- The nature of product and whether any significant alteration to the product takes place in the territory of the EU on route to the UK, specifically whether the consignment is simply broken down or undergoes repackaging or some simple level of processing prior to onward trade to the UK.
- Whether the product remains formally ‘in transit’ under the provisions of the CTC.
- Whether the good enters the customs territory of the EU prior to onward movement to the UK.
- The basis on which the UK finally leaves the EU customs union and single market.
- The efficiency of UK border control services and border clearance infrastructure in the face of the basis on which the UK leaves the EU customs union and single market.
All these factors will influence the impact the UK’s departure from the EU customs union has on ACP exports to the UK. In addition even direct ACP exports to the UK will be affected by the new UK/EU border requirements, in terms of the trade documentation required to enter the UK customs area and the overall efficiency of UK border control services, in the face of the new demands a UK/EU border will generate. ACP exporters will need to be alert to and prepare for all these potential impacts, with the level of adjustment required varying considerably across products. Read more “Will ACP Exports to the UK Be Impacted by the New UK-EU Border Control Requirements?”