Category: Regions

The Case of Fresh Horticultural Products What Does the New EU UK Trade Agreement Mean for ACP Triangular Supply Chains?

epamonitoring

 

Summary
Of the three major issues arising in the ACP horticulture sector trade in the context of the new EU/UK trade arrangement, the most important relate to rules of origin verification, given the absence of any ‘diagonal cumulation’ arrangements.  This may require all ACP horticultural exports entering the UK market via the EU to remain under customs supervision (under Common Transit Convention procedures) if duty-free access to the UK market is not to be lost. Currently the infrastructure for the effective implementation of CTC procedures is not fully in place, with this potentially posing challenges for the onward trade in ACP horticultural products to the UK market. The phasing in of UK phytosanitary import controls poses tricky choices for ACP exporters in the first months of 2021. Efforts to simplify EU/UK procedures for the cross-border movement of goods could usefully take on board ACP concerns. ACP organic exporters will need to keep a close eye on how EU/UK mutual recognition of organic certification evolves in 2023, so timely and appropriate action can be taken to ensure exports can still be placed for sale as organic products in the target markets after 2023. Read more “The Case of Fresh Horticultural Products What Does the New EU UK Trade Agreement Mean for ACP Triangular Supply Chains?”

The Case of Cocoa What Does the New EU UK Trade Agreement Mean for ACP Triangular Supply Chains?

epamonitoring

Summary
The simple change of tariff heading rules of origin requirements for simple value-added cocoa products (1803, 1804 and 1805) included in the EU/UK trade agreement means the existing ACP cocoa supply chains within which the processing of ACP cocoa beans takes place in the EU prior to onward shipment to the UK will face no disruption as a result of the new EU/UK trade arrangements.  However, more complicated rules of origin are faced for cocoa products containing sugar which fall under tariff heading 1806. In addition, the absence of ‘diagonal cumulation’ provisions in the EU/UK trade agreement, means ACP value added   cocoa products shipped to the UK via the EU will in future need to remain under customs supervision prior to landing in the UK; with extensive use being made of the Common Transit Convention (CTC) in the handling of such cargoes. However, currently there are serious infrastructure and human capacity constraints on the UK’s efficient operation of CTC procedures. This will complicate the immediate use of such arrangements. Scope for moving over to direct shipments to the UK would also appear to face some transitional challenges given current UK port congestion. More serious problems would appear to be faced in regard to onward trade from the EU to the UK in high sugar content value added cocoa product supply chains (e.g., chocolate bars) where these have traditionally used ACP sourced sugar. The absence of ‘diagonal cumulation’ provisions means manufacturers will need to shift over to the use of ‘wholly obtained’ EU or UK sugar, if eligibility for duty free access for high sugar content value added cocoa products is to be retained. Read more “The Case of Cocoa What Does the New EU UK Trade Agreement Mean for ACP Triangular Supply Chains?”

Growth in EU27 Poultry Meat Exports Projected on the Basis of Continued EU/UK Duty Free Trade

epamonitoring

Summary
While the rate of growth in EU poultry meat exports is slowing down, the EC projects a continued expansion of EU exports up to 2030 on the back of a continued expansion of EU poultry production. While the December 2020 EU/UK trade deal will avert the imposition of standard MFN tariffs on EU/UK mutual trade in poultry products, the introduction of standard 3rd country import control requirements will generate some trade disruption.  This will largely affect UK poultry meat exports to the EU27. The trade in value added food products containing poultry meat is also likely to be complicated by new rules of origin requirements for EU/UK trade, given no agreement has been reached on ‘diagonal cumulation’ arrangements. These issues are likely to lead to some level of trade displacement of mutual EU/UK trade in poultry products to 3rd country markets. This is most likely to result in increased UK exports of poultry parts to non-EU27 markets. Read more “Growth in EU27 Poultry Meat Exports Projected on the Basis of Continued EU/UK Duty Free Trade”

Key Challenges Identified in the NAO Brexit Preparedness Report: Implications for the ACP

epamonitoring

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”

Punishing Start to Ghana’s Post Brexit Trade Relations with the UK

epamonitoring

Summary
Despite long-standing warnings over the complexities faced in rolling over EU trade agreements with West Africa and the need for transitional arrangement to avert a highly damaging hiatus in trade relations between Ghana and the UK, on 3rd January 2021 the UK government imposed standard MFN tariffs (£95/tonne) on Ghanaian bananas landed in the UK. This is effectively holding a gun to the head of the Ghanaian government to agree to specific provisions in the ‘rolled over’ agreement on the tariff phase down schedule. The Government of Ghana has long expressed concerns over the need to ensure consistency between it tariff commitments under the UK agreement and its regional ECOWAS trade protocol commitments. Given the political sensitivity of this issue in Ghana the ongoing UK/Ghana negotiations could run substantially beyond the matter of weeks alluded to in the Joint December 31st statement. This could seriously undermine Ghana’s long term banana export trade to the UK which has taken over a decade to build up and could ensure Ghana’s tuna canning plants which have been closed over Christmas, never reopen. The first step in the UK’s autonomous trade policy will then have been to undermine tens of thousands of jobs in a key Commonwealth ally in Africa, which represents a bastion of democratic stability in a troubled region. Read more “Punishing Start to Ghana’s Post Brexit Trade Relations with the UK”

Short Term Road Haulage Regulatory Fix Reassures Hauliers but Uncertainties Remain

epamonitoring

 

Summary
The EU has proposed regulatory proposals for contingency measures in four main areas: fishing activities, aviation connectivity and safety, road transport connectivity, and rail connectivity. The two main areas of concern to ACP exporters relate to rail and road connectivity between the mainland EU and the UK.  These regulatory measure for the road haulage sector while essential will not address the problems of road haulage delays and rising costs which are now emerging. However, these delays and cost increases will be much more severe from 1st January 2021 if these contingency measures are not in place. The issue of aviation connectivity, if not addressed could also carry consequences for international aviation services. This could compound the air freight challenges which have arisen as a result of the Covid-19 pandemic. Any breakdown in EU/UK fisheries relations meanwhile, could carry trade documentation and even tariff implications for the onward trade in ACP fisheries products from the EU to the UK. Read more “Short Term Road Haulage Regulatory Fix Reassures Hauliers but Uncertainties Remain”

UK Kenya Agreement Leaves Triangular Supply Chain Issues Unresolved but Suggests Progress on Rules of Origin Issues Could be Possible

epamonitoring

 

Summary
A Kenya-UK trade agreement has been concluded which preserves duty free access for Kenyan exports to the UK market beyond 31st December 2020. However, this agreement fails to avoid potential disruptions of all current supply routes for tariff free access to the UK market.  This is a result of the failure to address future trade issues along triangular supply chains, which serve the UK market via initial landing in the EU. This issue is of considerable importance to the East African region, given the current routes used in serving the UK market in major export sectors (e.g. cut flowers). In the context of a no-deal UK departure, issues will also arise for other major ACP triangular supply chains where some repackaging or simple processing takes place in the EU prior to onward shipment to the UK. These triangular supply chain issues need to be urgently addressed. While the relaxation of UK phytosanitary controls could facilitate an expansion of Kenyan exports to the UK, this is highly unlikely in the livestock sector. Rules of origin improvements could prove relevant in other ACP-UK EPA contexts and should be studied closely. Finally, the 7-year moratorium on tariff reductions defers any immediate conflicts between the implementation of the UK-Kenya agreement and the maintenance of a common external tariff for the East African Customs Union Read more “UK Kenya Agreement Leaves Triangular Supply Chain Issues Unresolved but Suggests Progress on Rules of Origin Issues Could be Possible”

Appointment of Chief Trade Enforcement Officer Could Signal a Push More Rigorous Enforcement of EPA Commitments Made by ACP Governments

epamonitoring

Summary
The appointment of an EU Chief Trade Enforcement Officer is likely to see the EU more rigorously enforce the commitments entered onto by ACP governments under EPAs. Particular concerns arise in regard to the interpretation and application of provision dealing with trade defence mechanisms established under the EPAs (safeguard and anti-dumping provisions), the ‘Prohibition of quantitative restrictions’, and ‘National treatment’. The rigorous interpretation and enforcement of these commitments could undermine national agri-food sector development strategies across a wide range of ACP countries.  There are concerns disputes with ACP countries constitute areas for ‘early wins’ for the CTEO, given the limited legal capacity of ACP governments to engage in dispute settlement processes and the limited scope for ACP retaliatory action. Particular concerns arise in product areas where a no-deal Brexit could generate severe EU/UK trade disruptions (e.g. the poultry meat sector) and ACP markets are major outlets for EU exports. Read more “Appointment of Chief Trade Enforcement Officer Could Signal a Push More Rigorous Enforcement of EPA Commitments Made by ACP Governments”

EU joins UK in rolling over recognition of organic certification throughout 2021

epamonitoring

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”

South Africa’s Poultry Sector on the Road to Recovery as Stricter Trade Regime Applied

epamonitoring

 

Summary
According to analysis from the United States Department of Agriculture, Foreign Agricultural Service, the South African poultry meat sector is recovering following a post drought recovery of maize crops which has lowered feed costs, agreement on a Poultry Sector Master Plan and the application of new trade policy measures designed to provide relief from low cost poultry imports. However, there is a hole in South Africa’s poultry sector trade policy arising from the de facto effect of EU-South Africa trade agreements. These exclude EU exporters form general tariff changes and profoundly undermine the effectiveness of the anti-dumping and safeguard measures nominally allowed under these agreements. This situation is compounded by legal loop-hole challenges from the EC of South African safeguard measures, which if upheld would seriously undermine the development dimension of EU trade agreements with sub-Saharan African trade partners. Read more “South Africa’s Poultry Sector on the Road to Recovery as Stricter Trade Regime Applied”