Category: Regions

EU Sugar Sector Restructuring Seeing Stabilisation of EU Production Import and Export Trends Which Pose Challenges for Some ACP Sugar Exporters

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Summary
EU sugar production is stabilising but on a gradual upward trend to 2030, in the context of declining human consumption of sugar in the EU.  This will see reduced EU sugar imports and increased EU sugar exports with the EU being a growing net sugar exporter from 2024. EU corporate adjustment to the post quota market realities continues apace, with factor closures in efficient beet sugar production zones as processing operations are consolidated to maximise cost reductions. Maximisation of utilisation of installed capacity efforts place beet co-refiners in a more competitive position than traditional raw cane sugar refiners, with some ACP exporters still needing to rethink their marketing strategies in light of the evolving EU27 market realities. Some ACP sugar exporters however are constrained in their marketing options by existing patterns of corporate ownership. Responding effectively to evolving EU market realities and the UK’s future sugar sector MFN tariff policy will be critical to the commercial viability of existing patterns of ACP sugar exports to the EU27 and UK market respectively. Read more “EU Sugar Sector Restructuring Seeing Stabilisation of EU Production Import and Export Trends Which Pose Challenges for Some ACP Sugar Exporters”

EU Organic Import Control Implementing Regulation Highlights Potential for Brexit Related Trade Administration Based Disruption of ACP Exports

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Summary
Changes in the administration of the Certificate of Organic Inspection (COI) in the EU’s TRACES computerised trade facilitation system, aimed at strengthening traceability along organic supply chains have given rise to problems which could see some imports of organic products from ACP countries diverted back onto the general market, at substantial commercial cost to the ACP exporters concerned. The potential problem however has been swiftly identified and existing dialogue structures have been used to raise with the EC the specific concerns of ACP organic exporters. The EC has swiftly proposed modifications to the TRACES reporting scheme, with ACP exporters now being invited to clarify whether this solution addresses the administrative problem which had arisen. This issue in the organic sector highlights the vital importance of ensuring the smooth functioning of trade administration arrangements to ACP suppliers of short shelf life products. It raises serious concerns over the absence of any formal institutionalised mechanisms for ACP trade dialogue with the UK, should problems in trade administration documentation arise within the process of the UK’s departure from the EU customs union and single market. Read more “EU Organic Import Control Implementing Regulation Highlights Potential for Brexit Related Trade Administration Based Disruption of ACP Exports”

EU Poultry Sector Projections Suggest Continued Strong Growth in EU Poultry Exports to Africa

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Summary
The export of chicken parts (particularly bone- in quarters and halves) is driven by expanding EU poultry meat production, given the EU consumer preference for breast meat. This is greatly assisted by a protective trade policy which carefully manages imports of poultry meat to allow EU producers to fully benefit from growing EU consumer demand, despite their production cost disadvantages compared to competitive 3rd country poultry meat exporters. This enables the maintenance of higher EU market prices which allows a cross subsidisation of exports of residual poultry parts. Against this background across a growing number of sub-Saharan African countries, the strong growth in EU poultry meat exports which stifles local poultry sector development in the face of growing African consumer demand is set to continue. Read more “EU Poultry Sector Projections Suggest Continued Strong Growth in EU Poultry Exports to Africa”

The UKs Commitment to Regulatory Divergence Could Complicate Functioning of ACP Triangular Supply Chain Exports to the UK Market

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Summary
Recent statements by the UK government committing it to regulatory divergence from the EU once it has left the EU customs union is causing concerns in the UK food and drink sector that this will sound the death knell of frictionless trade with the EU. While it remains unclear to what extent the desire not to be governed by EU defined rules will translate it actual regulatory divergence, serious issues arise for ACP exporters of short shelf life agri-food products who serve the UK market along supply chains which pass through EU27 member states. This is leading to calls for the UK and EU authorities to:

  • waive any need for customs checks for good transiting EU27 member states where duty free-quota free access if enjoyed to both the UK and EU27 markets under parallel ‘rolled-over’ trade arrangements;
  • waive any need for UK phytosanitary checks on the basis of an EU commitment to the continued conduct of phytosanitary checks on imports destined for the UK market;
  • the communication of these commitments to concerned supply chain stakeholders and supporting the establishment of logistical and administrative arrangements to ensure the continued smooth flow of short shelf life products along triangular supply chains.

Read more “The UKs Commitment to Regulatory Divergence Could Complicate Functioning of ACP Triangular Supply Chain Exports to the UK Market”

Implications for ACP Agriculture of the New EC President’s Agenda

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Summary
There are 3 main areas of concern for ACP agri-food sectors arising from the EC’s new priority programme. The appointment of a Chief Trade Enforcement Officer could lead to increased pressure on ACP governments to eliminate the use of non-tariff barriers on imports form the EU as agreed in most concluded EPAs. This needs to be seen in the context of the increasing interest of EU agri-food businesses in rapidly growing African markets, evolving global economic trends and trade conflicts elsewhere. New EC trade related sustainability commitments, depending on how they are interpreted and applied in practice could increase the costs of serving EU market, with the burden falling particularly heavily on small scale exporters and smallholder farmers across the ACP. Budgetisation of the EDF alongside Brexit related financial pressures and ongoing security and migration concerns on the EU’s southern border could see far less grant financed development assistance being extended to agriculture development in ACP countries, with loan based financial instruments being unlikely to meet the needs of smallholder producers or small and medium sized agri-food sector enterprises in ACP countries. Read more “Implications for ACP Agriculture of the New EC President’s Agenda”

UK Africa Investment Conference Aims to Boost UK Trade With Africa But What of Current African Exports to the UK?

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Summary

While the UK government has launched a UK-Africa investment conference to showcase the financial services the City of London can offer in mobilising investment financing, it is neglecting a range of nuts and bolts trade issues in the agri-food sector which could profoundly impact on around €1 billion in African exports to the UK market. This includes sectors which in the past 20 years have attracted considerable investment in export orientated production and which have generated 100,000 of employment opportunities. These issues, notably in regard to the UK’s future MFN tariff regime and the administrative measures which need to be taken to ensure the continued smooth functioning of triangular supply chains, which serve the UK market via the Netherlands and Belgium need to be urgently addressed. Read more “UK Africa Investment Conference Aims to Boost UK Trade With Africa But What of Current African Exports to the UK?”

Entry into Force of New EU Plant health Regulation Could Pose Serious Challenges for ACP Horticulture Exporters

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Summary

EU phytosanitary controls are becoming increasingly stringent and administratively demanding. Almost all fruit and vegetable products will now require phytosanitary certificates and be subject to document checks which are being applied with varying degrees of rigour by different national EU phytosanitary authorities. For high risk products comprehensive documentation on control measures in place will need to be submitted in advance, if continued access to the EU market is to be allowed. These stricter EU import controls will require the adoption of pre-export pest control and verification measures. The costs increasing effects this gives rise to could drive smaller ACP exporters out of the EU market, although it is Kenyan pepper exports who have been the first to diversify away from the EU market to lower priced but more reliably accessible markets in the Middle East. The scale of ACP exports potentially adversely affected is huge. However, the UK’s departure from the EU customs union and single market could offer some relief if future UK risk assessments for phytosanitary controls were to be based solely on UK agri-climatic conditions and patterns of production and not pan EU agri-climatic conditions and patterns of production. Read more “Entry into Force of New EU Plant health Regulation Could Pose Serious Challenges for ACP Horticulture Exporters”

Growing Support for Payment of the Living Income Differential in the Cocoa Sector

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Summary
There is growing support for the payment of the living income differential to cocoa farmers, but with the Ghana Cocoa Board and Conseil du Café Cacao of Cote d’Ivoire insisting on the need for close monitoring of how the initiative is implemented alongside private sector sustainability schemes. The LID needs to be seen as floor price on which private sector initiatives can build to ensure cocoa farming communities not only survive but prosper. Read more “Growing Support for Payment of the Living Income Differential in the Cocoa Sector”

Addressing the Needs of ACP Triangular Supply Chains Within the Forthcoming EU/UK Trade Negotiations

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Addressing the Needs of ACP Triangular Supply Chains Within the Forthcoming EU/UK Trade Negotiations

Summary

Given the UK governments commitment to leaving the EU custom union and single market by 1st January 2021 and the time constraint this places on establishing a successor trade agreement, the EU takes the view only a ‘light’ EU/UK trade arrangement can be in place by 1st January 2021. It is essential such a ‘light’ trade arrangement addresses the specific policy and administrative issues which will arise along ACP triangular supply chains as a result of the UK formally leaving the EU customs union and single market on 1st January 2021. For this to occur a specific commitment will need to be included in the EC’s negotiating mandate, to be finalised by February 2020, to addressing triangular supply chains issue. This is a particularly important issue for cut flower, fruit and vegetable exporters in Eastern Africa, whose principal supply routes to UK markets lie through initial ports of landing in the Netherlands and Belgium. A political initiative towards the President of the European Commission will be required from the governments of concerned ACP exporting countries if arrangements to ensure the continued smooth flow of short shelf life cut flowers, fruit and vegetable products to the UK market along triangular supply chains is to be assured. Read more “Addressing the Needs of ACP Triangular Supply Chains Within the Forthcoming EU/UK Trade Negotiations”

Ghana prepares for EPA implementation with finalisation of its revised tariff offer

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Summary
The government and Ghana has agreed revised tariff phase down commitments on imports from the EU. Tariff reductions will commence in the first quarter of 2020 and be completed by 2029. It is unclear how the revised EPA will support Ghanaian structural development objectives given wider trends in trade with the EU. However it is likely to accelerate existing trends towards expanded EU agro-food exports to Ghana and increase pressure on Ghana to sign a bilateral FTA with the UK within 18 months. Potentially Brexit could open up opportunities for an expansion of Ghanaian exports of value added cocoa products and preserved tuna directly to the UK market. This could support Ghanaian structural economic development objectives. This however will require the conclusion of an agreement with the UK which in the long term preserves current duty free-quota free access for Ghanaian exports. Discussions around cocoa sector issues could be complicated by growing concerns in the EU over the level of deforestation resulting from cocoa production in West Africa. Read more “Ghana prepares for EPA implementation with finalisation of its revised tariff offer”