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”
Category: Southern Africa
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”
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”
Variable Application of Citrus Sector Phytosanitary Import Controls Highlights Practical Challenges of Regulatory Alignment in Future UK/EU Relations
Summary
The huge discrepancy in Citrus Black Spot interception rates between Spanish, Dutch and UK border control authorities raises questions as to the commonality of current control measures implemented by EU member states. It also raises questions as to the extent and nature of future regulatory alignment requirements once the UK leaves the EU customs union and single market. This is an important issue for ACP exporters who use triangular supply chains in delivering short shelf life, fruit, vegetables and cut flowers to the UK market. Minimising SPS controls at EU/UK borders will be critical to the future commercial viability of these routes to UK markets. Current Covid-19 flexibilities and innovations in the exercise of official controls could hold some important lessons for future EU/UK SPS border controls, particularly if the policy focus was on the practical outcomes in terms of the phytosanitary protection of domestic agricultural production, rather then the modalities for the application of controls. Read more “Variable Application of Citrus Sector Phytosanitary Import Controls Highlights Practical Challenges of Regulatory Alignment in Future UK/EU Relations”
EC Rejects Accusations South African Imports Behind Spanish Citrus Sector Difficulties
Summary
An EC analysis has found that contrary to Spanish citrus industry claims, imports from South Africa are not the cause of the current difficulties in the Spanish citrus sector. The lack of well organised producer organisations is seen as the root cause of many of the sectors problems. This view is supported by the latest data posted on the EU’s Citrus Market Observatory website. The Citrus Growers Association of South Africa has welcomed the EC’s findings and has called for joint action with Spanish producers to boost global citrus consumption in the face of competition from other fruits. The heightened consumer health consciousness linked to the Covid-19 pandemic could provide a springboard for such a longer-term citrus promotional campaign. Read more “EC Rejects Accusations South African Imports Behind Spanish Citrus Sector Difficulties”
More Evidence Sugar Levies Work in Stimulating Product Reformulation
Summary
Daily per capita sugar consumption in soft drinks in the UK has declined by 30% between 2015 and 2018, in part in response to the Soft Drinks Industry Levy. This decline could see similar such measures introduced for other high sugar content food products. Some 73% of the decline was driven by industry reformulation efforts and 27% by changing consumer purchasing patterns. An important underlying driving force however is the trend towards healthier eating, which is largely immune to short term price falls (as induced by the economic effects of the Covid-19 pandemic). This will accelerate the trends towards reduced Eu sugar consumption which is already underway. If ACP sugar exporters remain focussed on the EU market, they will need to target increasingly differentiated member states sugar markets, since considerable price premiums exist on in certain national EU sugar markets (region 3 countries). Read more “More Evidence Sugar Levies Work in Stimulating Product Reformulation”
New EU MRLs Highlight the Difficulties in Securing International Consensus on SPS Issues, Despite EU’s Dominant Role in Setting Regulatory Standards
Summary
The EU continues to set and re-set pesticide and fungicide Maximum Residue Level (MRLs) at far stricter levels than internationally agreed standards. ACP exporters serving EU markets have no option but to comply or exit the EU market. Freshfel’s call for ‘better defined international standards’ to facilitate EU fruit and vegetable exports, since uneasily with the unilateral standard setting practiced by the EU, which regularly presents new compliance challenges for ACP fruit and vegetable exporters. This raises important policy issues regarding the EU’s role in the de facto setting of international standards and the limitations of SPS chapters and institutional mechanisms established under trade ACP-EU FTAs for ensuring EU markets remain open to ACP products which comply with agreed international regulatory standards. Read more “New EU MRLs Highlight the Difficulties in Securing International Consensus on SPS Issues, Despite EU’s Dominant Role in Setting Regulatory Standards”
Covid-19 Pandemic Raises Questions Over the Brexit Effect on ACP Triangular Supply Chains
Summary
The Covid-19 pandemic is highlighting the supply chain problems which can arise when border clearance arrangements come under stress from increased demands and reduced capacities. This is bringing into question the future commercial viability of existing ACP triangular supply chains for short shelf life products in serving the UK market. This needs to be seen in the light of the border clearance challenges and associated transportation disruptions which are likely to arise as a result of the UK governments’ current approach to future trade relations once it leaves the EU customs union and single market. Current policy responses to transportation disruptions associated with border clearance problems linked to the Covid-19 pandemic, could provide a basis for longer term arrangements to facilitate the continued smooth functioning of triangular supply chains. In the absence of such initiatives ACP exporters will need to explore opportunities for direct exports to the UK or diversification away from the UK market. Read more “Covid-19 Pandemic Raises Questions Over the Brexit Effect on ACP Triangular Supply Chains”