Summary
With nearly 40% of Kenya’s direct exports to the UK currently benefitting from significant margins of tariff preferences, concerns have arisen around the UK’s current MFN tariff review and the future basis for Kenya’s continued duty-free access to the UK market after 1st January 2021. In addition, there are growing concerns about the future commercial viability of the use of triangular supply chains for the delivery of Kenyan short shelf life products to the UK market if no comprehensive EU/UK trade agreement is in place by 1st January 2021. Any future EU/UK trade agreement would need, as far as possible, to replicate the current frictionless trade, on which the operation of these triangular supply chains depends. This is looking increasingly unlikely. The Government of Kenya thus faces a triple challenge in ensuring a continuation of current patterns of exports to the UK market into 2021. Read more “What Challenges Does Kenya Face in Ensuring Continuity in its Current Access to the UK Market?”
Category: Regions
Absence of Clear Region of Origin Labelling of Poultry Suggests a Need for Pre-emptive Import Restrictions as Spread of Highly Contagious AI Spreads Across Europe
Summary
The spread of highly contagious avian influenza (AI) across Europe in the absence of clear place of origin labelling of the birds from which poultry meat exports are derived, would suggest a need for the pre-emptive introduction of import restrictions where domestic ACP poultry production could be vulnerable to infection. If the EU wants to keep export markets open in the face of periodic outbreaks of high contagious AI within Europe, then mandatory labelling of the place of origin of the birds from which poultry meat exports are derived would appear to be essential. Read more “Absence of Clear Region of Origin Labelling of Poultry Suggests a Need for Pre-emptive Import Restrictions as Spread of Highly Contagious AI Spreads Across Europe”
Is the EC Preparing for Greater Enforcement of ACP Trade Agreement Commitments?
Summary
The commencement of operation of the EC’s new chief-trade-enforcement officer from 1st May 2020, places the EC’s revised negotiating directives on EPAs with ACP countries in a new light. While the emphasis on the removal of both tariff and non-tariff barriers to EU exports to ACP markets has been a long-standing feature of EU trade agreements (since 2008). Many of the provisions on the elimination of non-tariff barriers have not been effectively enforced to date. The fear is this could change from the second half of 2020, with this carrying important implications for the policy space African governments retain for the promotion of integrated national agri-food sector development. This needs to be seen in a context where growth in demand for agri-food products is increasingly concentrated in African not EU markets. Read more “Is the EC Preparing for Greater Enforcement of ACP Trade Agreement Commitments?”
The Link Between EU Agri Food Sector Protectionism and the Value of ACP Trade Preferences Highlighted
Summary
The WTO has once again highlighted the EU’s extensive use of tariffs and non-tariff measures to manage EU agri-food markets. Preferred ACP exporters benefit from these protectionist EU trade policies, with any movement away from these policies potentially see mainly ACP/LDC exporters losing out to the tune of €1.6 billion. The prospects of such losses are very real with regard to the UK market, where there is strong pressure under the current MFN tariff review to abandon MFN tariffs where the UK has no or only limited production interests to protect. Looking forward, within the EU, a long standing insistence on abolishing quantitative restrictions on imports from the EU under economic partnership agreements concluded with ACP countries, is being given new impetus with the creation a Chief Trade Enforcement Office, dedicated to making sure existing trade agreement commitments by 3rd countries are fully implemented. Such a course of action however sits uneasily with the EU’s own extensive use of quantitative restrictions in sensitive agri-food sectors. Read more “The Link Between EU Agri Food Sector Protectionism and the Value of ACP Trade Preferences Highlighted”
Debate on West African Dairy Sector Trade Policies Likely to Intensify in Coming Years
Summary
Intra-regional dairy sector trade tensions are likely to intensify in West Africa in the coming years as the Government of Nigeria seeks to refine the use of its foreign exchange allocation system to support the development of local milk production, while Ghana and Cote d’Ivoire move ahead with tariff reductions on milk powders imports from the EU. The establishment of national platforms by EU dairy companies focused on regional markets, could see a growing formal and informal trade in reconstituted dairy products across West African borders, with a view to exploiting variations in the import tariffs levied on milk powders by different ECOWAS members. Read more “Debate on West African Dairy Sector Trade Policies Likely to Intensify in Coming Years”
EU Rice Consumption to Rise Slightly, But What Future Role ACP Suppliers?
Summary
Despite the strong growth in EU rice consumption and imports in recent years, ACP rice exporters have not benefited from this trend, with EU rice import growth being accounted for by imports from Myanmar and Cambodia, both of which are LDCs. With EU rice consumption and imports stabilizing, the only prospect for increased EU imports of rice from Guyana and Suriname would appear to lie with an extension of existing human rights related sanctions, which have seen certain EBA tariff preferences withdrawn from Cambodia. This would require such measures to be extended both in terms of product scope and geographical coverage to encompass both rice and Myanmar respectively. The EU currently has no plans to take any such action at the moment, with the response of the Government and Cambodia and Myanmar to ongoing enhanced dialogues on human rights being critical to the future evolution of the EU’s trade and human rights policy. Read more “EU Rice Consumption to Rise Slightly, But What Future Role ACP Suppliers?”
Will St Lucia Continue to Have an Export Trade Relationship with the UK once the UK Leaves the EU Customs and Single Market?
Summary
With the UK’s current MFN tariff review posing the question: should the UK government remove all tariffs where the UK has ‘zero or limited production interest’, the St Lucian banana sector could lose significant margins of tariff preferences which could prove to be the final nail in the coffin of St Lucia’s banana exports to Europe. The UK is the only EU market served by St Lucian banana exports with bananas accounting for fully 83% of total exports to the UK. This could see only a marginal residual export trade relationship remaining from 2021. With the UK market taking more in exports from St. Lucia than all the other EU27 market combined, this would also profoundly undermine St Lucia’s export trade relationship with the EU. Given the basis the banana trade provides for ongoing efforts at agricultural export diversification, retaining in place existing UK MFN tariffs is essential to St Lucia’s continued trade relationship with the UK Read more “Will St Lucia Continue to Have an Export Trade Relationship with the UK once the UK Leaves the EU Customs and Single Market?”
No Real Respite for African Milk Producers Given Projected Trends in EU Dairy Production and Exports
Summary
EU milk production will continue to expand in the coming decade adding 1 million tonnes per year up to 2030. The growth rate in global import demand for dairy products is however slowing down as self sufficiency rate sin some developing country regions improve. The EU will however remain the leading global diary exporter. The main area of concern for ACP countries is EU milk powder exports. Where sustained high levels of skimmed milk powder (SMP) exports will be maintained, though be it below the 2019 peak. Exports of fat filled milk powder (FFMP)will also continue to increase, reinforcing an import-based model of African dairy sector development. This will be reinforced by EC efforts to secure the removal of both tariffs and all non-tariff barriers to EU exports of dairy products to growing African markets. A more detailed analysis of the impact of these EU exports on local integrated African dairy sector development is needed, with this requiring better reporting on trends in EU export of FFMPs. A key question remains: how can the EU’s current short-term export maximization focus in dairy sector relations with Africa be reconciled with the longer term need to promote the structural development of Africa milk production and the locally integrated development of African dairy sectors? Read more “No Real Respite for African Milk Producers Given Projected Trends in EU Dairy Production and Exports”
UK to Strike Out on Bold New Trade Policy but Will Africa and the Caribbean Take the Hit?
Summary
The UK has formally announced the launch of an on-line public consultation on its future MFN tariff regime. This consultation appears limited to UK stakeholders and largely ignores the UK’s trade and development commitments enshrined in a host of preferential trade arrangements the UK has sought to ‘roll over’. The value of these ‘rolled-over’ trade arrangements would be profoundly undermined by any move towards the kind of zero UK MFN tariff regime which the Secretary of State appears to be championing. Some €1.5 billion in African and Caribbean exports, mainly from Commonwealth countries would be adversely affected, with 8 countries seeing over 70% of their current direct exports to the UK adversely affected and a further 7 countries likely to see between 46% and 69% of their direct exports to the UK adversely affected. With no formal structure for dialogue with the UK government operative, there is a need for special initiatives from African and Caribbean governments to place their concerns around the current UK MFN tariff review on the table for consideration by the UK government. Read more “UK to Strike Out on Bold New Trade Policy but Will Africa and the Caribbean Take the Hit?”
Opening Salvoes Setting Out UK ‘Redlines’ in UK/EU Negotiations Pose Challenges for ACP Triangular Supply Chains
Summary
The UK governments rejection of binding commitments on regulatory alignment with the EU and insistence on preparing for full border controls if a comprehensive FTA with the EU cannot be agreed and in place by 1st January 2021 is causing concern in business circles. The British Ports Authorities has described this new policy approach as likely to create a situation which looks ‘a bit like a no-deal’. This could seriously disrupt the functioning of ACP supply chains which serve UK markets for short shelf life horticulture and floriculture products via initial ports of landing in EU27 member states. Special arrangements for the handling of this onward trade are required if a range of ACP exporters of short shelf life horticulture and floriculture products are not to be driven out of the UK market. These special arrangements need to be agreed in a matter of weeks if private sector operators are to make the necessary investments in ensuring the continued smooth flow of ACP goods to the UK market along these triangular supply chains from 1st January 2021. Read more “Opening Salvoes Setting Out UK ‘Redlines’ in UK/EU Negotiations Pose Challenges for ACP Triangular Supply Chains”