Summary
The recent acquisition by Plukon highlights the pan-European nature of EU poultry companies. This potentially complicates the application of ACP SPS controls on imports of poultry meat from the EU, in the face of regular national outbreaks of HPAI, which requires the application of protective SPS measures. Intra-corporate trading raises the issue of need for country of origin labelling of EU products based on the country in which poultry was raised (not processed. This would facilitate effective SPS controls in the face of frequent outbreaks of HPAI in individual EU member states. Issues also arise around the application of country specific anti-dumping duties and rules of origin under EU trade agreements since such measures can easily be circumvented given the pan-European structure of many EU poultry companies, with this in some instances extending beyond the EU’s borders. Read more “Europeanisation of National EU Poultry Producers Continues with New Plukon Acquisition”
Category: Regions
RFC Announces Factory Expansion and Investments in Local Milk Supplies in Nigeria Amid Slowdown in Growth EU Exports of SMP
Summary
Royal FrieslandCampina has announced a new €23 million investment in developing milk-to-dairy supply chains in Nigeria. However it is unclear how much of this €23 million is linked to factory improvements to process locally sourced milk and how much targets the processing of imported milk powders. A revival of SMP prices to the December 2013 highs would appear necessary to provide a commercially significant stimulus to local milk production in Nigeria. This is likely to require the removal of production distorting EU farm supports, which stimulate EU milk production despite the production costs of most EU milk producers exceeding the revenue gained from milk sales. Since such an EU policy shift is highly unlikely, the Nigerian government may need to consider the introduction of a carefully manged dairy sector trade policy which links import licences to investments in the gradual expansion of local milk production serving local milk-to-dairy supply chains. This would need to be designed and implemented in close consultation with dairy sector stakeholders. However it is unclear whether the implementation of such a carefully managed trade regime would be possible in a country as large and politically complex as Nigeria. Read more “RFC Announces Factory Expansion and Investments in Local Milk Supplies in Nigeria Amid Slowdown in Growth EU Exports of SMP”
State of Play in the EU/UK Brexit Negotiations: Update 4 February 2019
Summary
The last epamonitoring.net article dealing with the process of EU/UK withdrawal negotiations covered the EU’s approval of the UK/EU Withdrawal Agreement (26th November 2018) and the subsequent deferment of the UK parliamentary vote on approving the Withdrawal Agreement. From mid-December until mid-February the UK Parliamentary process for ratifying the mutually agreed EU/UK Withdrawal Agreement has been stalled. This article provides an update of developments since the December 2018 UK governments’ decision to defer the Parliamentary vote on the Withdrawal Agreement until 2019 and the potential implications for ACP exporters serving the UK market of the ongoing uncertainty. Read more “State of Play in the EU/UK Brexit Negotiations: Update 4 February 2019”
UK Signs Continuity Agreement with ESA Governments
Summary
The UK’s ambition to ‘rolled over’ EU reciprocal trade agreements into ‘UK only’ trade agreements has been given practical expression with the conclusion of the first 2 ‘Continuity Agreements’, with Chile and the ESA EPA Group respectively. Additional agreements are planned in the coming weeks with CARIFORUM, Fiji, PNG and the SADC EPA group. However it is unclear whether such trade agreements can be concluded with Kenya, Ghana, Ivory Coast and Cameroon. Failure to conclude a Continuity Agreement would see exporters in these countries facing standard MFN or GSP import tariffs. These Continuity Agreements appear to leave a range of important issues unresolved ranging from: the trade documentation to be utilised from day 1 of Brexit; the future value of duty free quota free access to the UK market in the post Brexit context; the disruptive impact of a non-deal Brexit on triangular supply chains and most fundamentally the rules of origin to be applied under ‘UK-Only’ trade deals once the UK is no longer part of the single EU customs territory. It is unclear whether these ‘Continuity Agreements’ are simply a mechanism to secure ACP duty free-quota free access to the UK market under a ‘no-deal’ scenario or a crafty attempt to side step comprehensively addressing the rules of origin constraint on UK exporters under ‘UK-Only’ trade deals which will arise from leaving the customs territory of the EU. In this context it would appear more appropriate for the UK government to unilaterally extend existing terms and conditions of access to the UK market which ACP EPA signatories enjoy, so as to allow time for a more thorough going negotiation of bilateral UK-only trade agreements which are WTO compatible, operationally applicable and development friendly. Read more “UK Signs Continuity Agreement with ESA Governments”
Part 2 Country Specific Trends in EU Agri-food Sector Trade with ESA EPA Countries
Summary
The value of EU agri-food exports to Mauritius grew 53% between 2013 and 2017 while the value of EU agri-food imports from Mauritius fell 26%, with this largely attributable to the impact of EU sugar sector reforms. A ‘no deal’ Brexit however could present opportunities for Mauritian refined sugar exporters. In contrast the value of Malagasy agri-food exports to the EU grew 164%, while the value of imports from the EU grew 44%. This is attributable to the fragile political and economic stability attained since 2013. Zimbabwe’s agri-food sector trade flows have been impacted by the sustained political and economic crisis, with volatile export values and no change in the value of imports from the EU for the period as a whole. The value of agri-food exports from the Comoros has increased almost 60% since 2013, with strong growth in the unit value of earnings of both vanilla and essential oils. EU agri-food exports to the Comoros have grown faster than overall exports, at double the rate, with a strong increase in the value of EU poultry meat exports and an even larger increase in the volume. There has also been a strong increase in EU beef exports to Comoros. The Seychelles has no agro-food sector export trade with the EU, while the value of agri-food imports from the EU rose 61% between 2013 and 2017. Dairy products led the way in this trade expansion, with EU poultry meat exports also getting under way during this period. Brexit related issues arise for Zimbabwe in the resurgent cut flower trade given the dominant role the Dutch flower auction houses play in this trade and the potential for Brexit related disruption of triangular supply chains. Initiatives will be needed to ‘Brexit-proof’ these supply chains. For Seychelles and Madagascar Brexit related rules of origin issues in the fisheries sector will also need to be addressed under a ‘no-deal’ outcome to the current Brexit negotiations, with this potentially opening up investment and export trade opportunities in relations with the UK. Read more “Part 2 Country Specific Trends in EU Agri-food Sector Trade with ESA EPA Countries”
Part 1 Overall Trends in EU Trade with ESA EPA Countries
Summary
The EU-ESA EPA is not a single agreement but a collection of five individual yet similar agreements covering a population of some 45.5 million. For 4 countries these agreement have been in place since 2012 while the 5th is scheduled to enter into force shortly. These agreements fall far short of the ambitious regional EPA, embracing up to 18 countries with a population of 541 million, which the EC initially sought. This has split the larger ESA region into 3 distinct groups in terms of trade relations with the EU, thereby complicating intra-regional trade integration efforts. Since the signing of the EPAs EU agri-food exports to ESA EPA signatories have grown strongly (+48%), despite there being no growth in direct EU exports to Zimbabwe. The growth in the value of EU agri-food imports from ESA4 countries was been slower at only +27%. This growth was attributable to the 164% growth in the value of imports from Madagascar which now dominates the ESA4 agri-food export trade to the EU. EU agricultural reforms and the multiplication of EU trade agreements with non-ACP countries are serving to reduce the value of traditional agri-food sector trade preferences, particularly for Mauritius and Zimbabwe. The Brexit process further complicates the situation, although a ‘no-deal’ Brexit could potentially open up new opportunities on the UK market for Mauritian refined sugar exports. Other important issues faced relate to the impact of the new EU plant health regulations on horticulture and floriculture exports and the impact of the expansion of EU agri-food exports on opportunities for the structural development of local agri-food sectors serving national and regional markets. ESA EPA signatories face differing challenges and opportunities as a result of current trends in EU agri-food exports to ESA EPA signatories and the wider Eastern and Southern African region. How EPA provisions are implemented in practice in the future, in the face of Brexit related commercial pressures, will have an important bearing on the future evolution of EU-ESA trade, as well as the scope for the development of intra-regional trade in the Eastern and Southern African region. Read more “Part 1 Overall Trends in EU Trade with ESA EPA Countries”
Cote d’Ivoire: EPA Implementation in the Context of EU’s West Africa EPA Strategy
Summary
In reviewing the EU-Cote d’Ivoire EPA the EC has placed considerable emphasis on the 80% expansion of Ivorian banana exports to the EU since the granting of full duty free-quota free access under the interim EPA in place of the former ACP Banana Protocol. This is seen as a major success story. However 2018 could prove to be the high point of Ivorian banana exports. Ecuador’s accession to the EU-Andean Pact FTA from 1st January 2017 has seen a 14.4% expansion of Ecuadorian banana exports to the EU in 2017 (+186,613 tonnes) and a 20% growth in the first 6 months of 2018. This has seen the first decline in Cote d’Ivoire’s share of the EU banana market in a decade. If a ‘no-deal’ Brexit occurs and EU bilaterally negotiated $ banana TRQs are not apportioned between the EU27 and UK markets, this will result in a significant increase in competition for Ivorian banana exports to EU27 markets, given the UK has accounted in recent years for 20% of EU banana imports. This down turn in the fortunes of Ivorian banana exporters will coincide with the start of the phased elimination of import duties on EU products, which is scheduled to start from 1st January 2019 and take place over a 14 year period. Read more “Cote d’Ivoire: EPA Implementation in the Context of EU’s West Africa EPA Strategy”
The Benefits PNG Has Derived from the Pacific-EU EPA
Summary
The EU-Pacific EPA is essentially two bilaterally concluded agreements with Papua New Guinea (PNG) and Fiji, which the EC hopes other Pacific ACP countries will accede to as they graduate out of LDC status. Agri-food products are of marginal importance in EU exports to PNG, but central to the EU’s imports form PNG, with the trade in palm oil playing a dominant role (around 58% of total imports by value). In recent years PNG has exported ‘differentiated’ palm oil in the form of ‘fully traceable sustainably certified palm oil ‘processed at a dedicated plant in the UK for distribution to sustainability sensitive food product manufacturers across the EU. It is unclear how a ‘no-deal’ Brexit would impact this trade. It is also unclear how Brexit could impact on the trade in canned tuna which has been a major growth area under the EU-PNG EPA. Read more “The Benefits PNG Has Derived from the Pacific-EU EPA”
Ghana: EPA Implementation in the Context of EU’s West Africa EPA Strategy
Ghana: EPA Implementation in the Context of EU’s West Africa EPA Strategy
Summary
Ghana, alongside Cote d’Ivoire, signed an interim EPA with the EU despite the stalled regional negotiations in order to preserve existing duty free-quota free (DFQF) access to the EU market. Since 2014 EU agri-food exports to Ghana have grown in value by 38.3%. This has seen strong growth in volume of EU poultry meat exports (+163%) and dairy exports (+44%), alongside a 93% increase in EU animal and vegetable fat exports and a 237.5% increase in exports of miscellaneous edible products. In contrast between 2014 and 2017 a small decline in the value of Ghanaian agri-food exports to the EU occurred. Despite this since 2008 the granting of full DFQF access for Ghanaian banana exports has seen a 57% increase in export volumes. However global volatile cocoa prices have held back any sustained growth in agri-food sector export values. Movement up the value chains to the export of more processed value added cocoa products is potentially offering greater agri-food sector export earnings stability and even growth in the future. However given the importance of the UK in Ghana’s export trade to the EU a key trade issue which is not being addressed is the impact of Brexit on the value of the Ghana-EU EPA preferences. A host or Brexit related issues need to be urgently addressed, including: securing continued DFQF access to the UK market after 29th March 2019; the scope for maximising opportunities for direct exports of value added cocoa products to the UK market arising from a ‘no-deal’ Brexit; minimising the trade diversion effects of Brexit on trade in animal products which could increase pressure on Ghanaian poultry, beef and dairy product markets; minimising the adverse effects of the EU’s new plant health regulation on emerging non-traditional horticulture and sub-tropical fruit exports. Read more “Ghana: EPA Implementation in the Context of EU’s West Africa EPA Strategy”
CARIFORUM EU EPA: Slow Pace of Implementation and Marginal Benefits
Summary
The EC’s analysis of the CARIFORUM-EU EPA while factually accurate is misleading. While the EU’s growing trade surplus with CARIFORUM is acknowledged the importance of the principal change brought about by the EPA – improved market access for EU exporters is glossed over. EU agro-food exports have shown particular strong growth with dairy products, meat and meat preparations, beverages and fresh vegetables leading the way. In contrasts the value of CARIFORUM agro-food exports has stagnated, although the masks a rise in agro-food exports to the EU from the Dominican republic and a decline in the value of CARICOM exports. The decline in CARICOM exports however mask a rise in non-traditional exports and a dramatic fall in the value of banana and sugar exports to the EU. Despite the institutional structures in place the single most important issue facing CARIFORUM exporters to the EU, Brexit, has not been addressed within EPA consultative structures. The impact of Brexit on the value of preferential exports under the EU EPA will be so profound as to require an immediate policy response from the EU to areas of CARIFORUM concern in regard to improving EPA implementation (e.g. removing all obstacles to full DFQF exports to the DOMs and OCTs, intensifying and acting on SPS dialogues, eliminating UTPs along CARIFORUM-EU supply chains, introducing flexibility in EPA implementation). The EU also needs to recognise and address the effects of its wider policy changes on the value of preferential access granted CARIFORUM countries under the EPA. Failure to do so will amount to a continued failure to deliver on the expectations raised by the EPA agreement in the Caribbean region. Read more “CARIFORUM EU EPA: Slow Pace of Implementation and Marginal Benefits”