Summary
Despite earlier fears the UK’s proposed future schedule has largely left unaffected MFN tariffs on agri-food products of export interest to Caribbean ACP countries. The principal issues now faced in future agri-food sector exports to the UK arise in the context of a possible ‘no-deal’ departure of the UK from the EU customs union and single market. These include: the need to ensure the continued smooth functioning of triangular supply chains given the regions limited shipping service options; the future evolution of EU sugar prices and the sourcing decisions of Tate & Lyle Sugars; the future basis of access for African banana exporters in the absence of rolled over UK-only ‘Continuity Agreements’ with Ghana, Cameroon and Cote d’Ivoire and the Covid-19 related interruption of negotiations; and the future phytosanitary imports controls to be applied to UK citrus imports. Read more “The Caribbean and the Outcome of the UK MFN Tariff Review”
Category: Regions
Future UK Only MFN Tariff Schedule Announced
Summary
After much speculation, the MFN tariffs on most agricultural and food products of greatest export intertest to ACP countries have been retained largely unchanged by the UK government. This will bring considerable relief to ACP banana, sugar, canned tuna, and value-added cocoa product exporters, where fears of the adoption of a ‘zero production-zero tariff’ approach had arisen. Across a range of other areas, relatively minor tariff reductions are unlikely to carry serious trade implications for ACP agri-food product exporters. The only area of uncertainty arises from the removal of the EU entry price system currently applied to a range of products and its replacement by simpler ad valorem import duties. It is unclear what the commercial impact of this change will be on individual ACP exporters of specific products. Read more “Future UK Only MFN Tariff Schedule Announced”
East African Dairy Sector Trade War Continues to Simmer
Summary
An ongoing dairy sector trade war in the EAC over accusations of the use of imported milk powders in value added products exported regionally, is seeing non-tariff barriers being used to block the free movement of dairy products within the EAC. The situation in the dairy sector is complex, with the conflict reflecting wider trade tensions. At heart there would appear to be a need to deepen regional economic integration if such trade conflicts are not to periodically flare up. The simmering trade war makes it particularly difficult for the EAC to reach agreement on ‘green lane’ protocols to keep trade moving in the face of the Covid-19 pandemic. This could potentially carry serious economic and food security consequences. In addition, regional trade tensions could well be exacerbated by the UK’s final departure from the EU customs union, which in the face of Covid-19 disrupted trade discussions could present the Government of Kenya with some very difficult choices between losing duty free access to the UK market at considerable cost to the Kenyan economy or going it alone with tariff liberalisation commitments to the UK which would impact on the whole of the EAC and exacerbate existing intra-regional trade tensions. The only way out of this bind would be for the UK governments to unilaterally extend the Transitional Protection Mechanism initially proposed for an 18-month period in October 2019. Read more “East African Dairy Sector Trade War Continues to Simmer”
EC Covid-19 Linked Agri food Sector Support Measures Extended
Summary
The EC has been far more modest in its market interventions in the agricultural sector in response to the Covid-19 crisis than to previous crisis situations. In many respects the EC is seeking to work with current trends, such as increased private sector stock holdings, with its measures being less likely to result it stock levels which will overhang global markets and depress future global prices to the detriment of ACP producers. However, a close eye will need to be kept on the impact of EU market intervention measures on trade flows in sensitive products to regions where this could exacerbate regional trade tensions. Of more general interest, the EC’s decision to re-deploy financing for longer term activities to short term emergency measures, offers a precedent which could usefully be applied to existing EDF financed cooperation activities in ACP countries, with the aim of assisting hard pressed ACP governments in responding to both the health and wider economic effects of the Covid-19 pandemic. However, this will hinge around an EC policy commitment to use future post-Cotonou financing instruments to reconstitute the budgets from which emergency funding has been re-deployed. Read more “EC Covid-19 Linked Agri food Sector Support Measures Extended”
Dutch Flower Auctions Gearing up for the End of the Lock Down Across Europe
Summary
Lock-down and social distancing measures collapsed demand for cut flowers in the EU. This saw a virtual closure of the Dutch flower auctions, with operations only now beginning to recover. However, demand is likely to remain depressed for a considerable time. Any relaxation of emergency supply management measures introduced by the EU cut flower industry is likely to see already depressed prices fall further. Should freight constraints on East Africa cut flower exports begin to be addressed while social distancing restrictions remain in force this could exert further downward pressure on prices. In the longer term a serious rethink of freight strategies and market orientation may be required in the East African cut flower sector. Read more “Dutch Flower Auctions Gearing up for the End of the Lock Down Across Europe”
Restrictions on Poultry Meat Imports Called for in the Face of Covid-19 Impact on EU Poultry Market
Summary
The European Poultry Producers Association (AVEC) has called for the EC to review the application of its TRQ based import regime for poultry meat to ensure import levels reflect the collapse of demand for out-of-home poultry meat consumption. With the EC being a strong advocate of open markets and with trade disputes pending in the poultry sector to remove barriers to EU exports, it will be worthwhile monitoring the EC’s response to AVEC’s call to limit imports via a review of how the TRQ regime for poultry meat is managed. Read more “Restrictions on Poultry Meat Imports Called for in the Face of Covid-19 Impact on EU Poultry Market”
Conditional Lifting of South African HPAI Import Ban on Dutch Poultry Meat Follows New HPAI Based Ban on Polish Poultry Meat
Summary
In January 2020, the South African government introduced HPAI based restrictions on poultry meat imports from Poland. Within 5 weeks similar restrictions on imports from the Netherlands, which had been in place since the beginning of 2017 were lifted. However, this was conditional on the validated certification the birds from which the meat was derived had been raised and processed in the Netherlands. The EU strongly objects to these conditions. In the fourth week of April the South African authorities were notified of the launching of a dispute settlement case under the EU-SADC EPA. This case was however immediately suspended in light of Covid-19 related constraints. South Africa’s conditional opening of its market to Dutch poultry products needs to be seen in light of the multiple HPAI outbreaks across Europe, the pan European nature and intra-corporate sourcing practices of European poultry companies and the serious constraints on the operation of South African SPS import controls in the face of the Covid-19 pandemic Read more “Conditional Lifting of South African HPAI Import Ban on Dutch Poultry Meat Follows New HPAI Based Ban on Polish Poultry Meat”
Growing Calls for an Extension of the EU-UK Transitional Period in the face of COVID-19 Economic Disruptions
Summary
The UK freight industry and British Chambers of Commerce have explicitly called for an extension of the transition period in E/UK relations, while the UK food and drinks industry has called for concerted action to avoid further trade disruptions which would compound the adverse economic effects of the Covids-19 pandemic. UK private sector bodies maintain neither business not the UK border services are prepared to implement customs and other border controls on trade with the EU from the 1st January 2021, given the disruptions to preparations which the Covid-19 pandemic has generated. While these difficulties are recognised and there is a dawning awareness in the UK government of the need to avoid a no-deal exit from the EU customs union, it appears no one in the UK government knows how politically to avoid this outcome. Against this background ACP businesses will need to start making preparation for a no-deal UK departure from the EU customs union and single market on 1st January 2021. Read more “Growing Calls for an Extension of the EU-UK Transitional Period in the face of COVID-19 Economic Disruptions”
Linking Bail Outs to Broader Policy Objectives
Summary
With both European airlines and cross channel ferry companies seeking multi-billion Euro government financed assistance programmes in the face of COVID-19 related disruptions of passenger services, the debate is underway on the need to link such public financing to wider policy objectives (e.g. GHG emission reduction targets). In this context there is also a need to link such public assistance to other broader objectives such as a restoration of freight charges for essential goods to pre-COVID-19 levels and the maintenance of freight handling capacity at pre-COVID-19 levels. This would assist in restoring existing ACP-EU supply chains for fresh fruit and vegetable imports, in the face of the severe disruptions the COVID-19 pandemic has given rise to. This would aid economic recovery in those African and Caribbean countries whose export orientated horticultural sectors have been severely disrupted by the pandemic. It would in addition help secure fresh fruit and vegetable supplies to meet the surging consumer demand for healthy eating options in those European countries with a high import dependence for fresh fruit and vegetable supplies. Read more “Linking Bail Outs to Broader Policy Objectives”
Growing Covid19 Related Concerns Over Fresh Food Supply Chains Could Carry Longer Term Implications
Summary
Covid-19 linked air freight, sea freight, road freight and port disruptions are placing strains on fruit and vegetable supply chains serving the UK and EU markets. Movement restrictions are leading to labour shortages which threaten future domestic European fruit and vegetable production. This is likely to push up prices throughout 2020, with this continuing well into 2021 for the UK, if the UK governments chooses at the end of 2020 to leave the EU customs union without a trade deal being in place. This is seeing a growing focus on shortening supply chains, with this likely to make itself felt first through the revision of supermarket sourcing practices. ACP governments should look to supporting policy responses to the Covid-19 trade disruptions across Europe which also address longer term issues in relations with the UK, including deferring the UK’s departure from the EU customs union to allow trade to recover from the devastation of in the post Covid-19 pandemic. ACP private sector exporters meanwhile should examine how they can cost effectively shorten their supply chains to reduce their vulnerability to future transportation disruptions, in a context where the transport sector knock-on effects of recent developments are likely to be felt for some years to come. Read more “Growing Covid19 Related Concerns Over Fresh Food Supply Chains Could Carry Longer Term Implications”