Summary
September 2018 saw WTO members again objecting to EU/UK agreed plans for apportioning WTO agreed TRQ market access arrangements without consultations with the affected partners. While ACP exporters are only marginally affected by this WTO level TRQ apportionment issue, ACP exporters have serious concerns over how the EU plans to apportion bilaterally negotiated TRQ established under EU FTAs. This could for example carry serious implications for ACP banana exporters, who from 30th March 2019 could face a de facto 20% increase in competition from $ banana exporters on EU27 markets. The governments of ACP banana exporting countries need to urgently seek consultations with the EC on what will happen to EU bilaterally negotiated banana TRQs from the 30th March 2019 under a ‘no-deal’ Brexit scenario. Or alternatively, if a Withdrawal Agreement is concluded and a transition period in EU/UK trade relations is set in place, what will happen to these bilaterally negotiated TRQ arrangements from 1st January 2021. Read more “EU/UK Proposals for Brexit Related TRQ Apportionment Continues to be Challenged”
Category: Southern Africa
EU Sees Mauritania’s EPA signature as Stepping Stone to an EU-Africa FTA?
Summary
The EU has sought to place Mauritania’s signature of the West African EPA in the context of the ‘new Africa-Europe alliance for sustainable investment and jobs’ initiative. The ultimate aim of this initiative is to secure a comprehensive EU-Africa FTA. The EC wants to see this include a revisiting of disciplines on domestic policy formulation which African governments consciously steered away from under the EPA negotiations. This needs to be seen in the context of the relative failure of the EC in securing FTAs with African countries. After 16 years of negotiations only 15 African governments have signed, ratified and are in the process of implementing EPAs, with this embracing only 24% of the population of sub-Saharan Africa. Against this background the EC appears to be looking to harness the ‘cart’ of its trade and investment ambitions in Africa to the ‘horse’ of the African Continental Free Trade Area. This could potentially complicate efforts to create a pan-African free trade area for agro-food products. In this context, in operationalising AfCFTA commitments, African governments will need to address the challenge of how to ensure the ‘tail’ of EPAs with the EU does not end up wagging the ‘dog’ of pan-African trade integration, simply by virtue of being first on the scene. Read more “EU Sees Mauritania’s EPA signature as Stepping Stone to an EU-Africa FTA?”
EU Poultry Exports to South Africa In the Face of Avian Influenza Based Export Restrictions
Summary
The introduction of Avian Influenza (AI) based restriction on imports from the EU has reversed the expansion of imports of EU poultry meat to South Africa which has been underway since 2010. However with local AI outbreaks depressing South Africa’s own poultry meat production imports increased from Brazil and the USA. SAPA continues to argue a major reduction in import volumes is needed if the South African poultry sector is to fulfil its potential as a creator of jobs and promoter of rural development. South Africa continues to call for an international initiative to address the problem of surplus ‘dark meat’. However the EU is unlikely to respond favourably to such suggestions given the potential threat to the EU poultry sector posed by Brexit related trade disruptions. Indeed under a ‘no-deal’ Brexit scenario the pressure to find new export markets for both EU27 and UK poultry meat is likely to increase. Read more “EU Poultry Exports to South Africa In the Face of Avian Influenza Based Export Restrictions”
How Close is the UK to ‘Rolling-Over’ EPAs into UK-Only Trade Agreements?
Summary
During her August tour of 3 African countries Prime Minister May reiterated the UK’s desire to ‘roll-over’ existing EU EPAs into UK-Only trade agreements as a way ensuring continuity of market access. However the joint statement signed in South Africa recognised there are a range of technical issues which still need to be resolved. In reality these range from: how precisely existing duty free access to the UK market is to be maintained from 30th March 2019 onwards; how complex rules of origin issues are to be addressed in ways which enhance export opportunities for ACP exporters and avoid disruption of current UK exports; the precise UK SPS controls to be applied post Brexit and whether this could reduce current non-tariff barriers to ACP exports; whether steps will be taken to eliminate unfair trading practices along ACP-UK supply chains and whether quantitative restrictions will be applied to South African exports to the UK where the UK has no or only limited domestic production interests. Read more “How Close is the UK to ‘Rolling-Over’ EPAs into UK-Only Trade Agreements?”
Will 2018 Be The Last Time South Africa Calls An Early Halt to Citrus Exports to Europe?
Summary
The South African season for the export of Valencia oranges to the EU has been terminated early to maintain the zero level of interceptions for citrus black spot achieved this year. The withdrawal of the UK from the EU could make this the last year such action is needed. However this would require the South African government to secure under any ‘UK-only’ trade agreement the waiving of citrus black spot controls on exports to the UK and the lifting of quantitative restrictions on citrus exports to the UK market. The removal of CBS controls on exports to the UK would not only benefit South Africa but also neighbouring Swaziland and Zimbabwe and, in the Caribbean, Belize. Read more “Will 2018 Be The Last Time South Africa Calls An Early Halt to Citrus Exports to Europe?”
Arla Highlights Short Term Dangers of a ‘No Deal’ Brexit in the Dairy Sector
Summary
Given the UK’s dependence on dairy imports the pan-EU dairy company Arla is deeply concerned about possible dairy trade disruptions under a ‘hard’ Brexit. Concerns were expressed over the application of non-tariff measures to EU27/UK trade, which it was felt, could lead to acute port congestion. Particular concerns were expressed over the likely shortage of vets to inspect animal products if standard 3rd country controls were applied. There were also concerns over possible labour shortages in the sector. Some of these concerns were held to apply even under a ‘softer’ Brexit scenario. As with the Russian embargo any disruption of EU/UK trade could see increased exports to ACP markets, particularly in West Africa and Southern and Eastern Africa. Read more “Arla Highlights Short Term Dangers of a ‘No Deal’ Brexit in the Dairy Sector”
Limited Prospects of a Global Sugar Market Price Recovery Exacerbates the Impact of Reduced EU Import Demand and Lower EU Prices
Summary
Global sugar price trends in the coming decade are likely to offer little support to ACP sugar exporters in the face of both lower EU prices and import volumes. Sugar consumption growth is increasingly in the global south, including in sub-Saharan Africa, where production growth although strong is lagging behind consumption growth. This is in part being driven by urbanisation and increased consumption of high sugar content processed food and drinks. This is recognised by the EU sugar companies which are increasingly focused on regaining export markets and developing new ones in sugar deficit regions such as sub-Saharan Africa. Rising EU export volumes beyond earlier projected levels is exacerbating the low price situation on global sugar market. Read more “Limited Prospects of a Global Sugar Market Price Recovery Exacerbates the Impact of Reduced EU Import Demand and Lower EU Prices”
Dairy UK and the European Dairy Association (EDA) Launch Joint Position to Minimise Brexit Related Dairy Sector Disruptions
Summary
UK and EU dairy associations are seeking to develop a common approach to avoiding Brexit related disruptions of the existing dairy trade. While the UK governments white paper proposals appear aimed at remaining as close as possible to the single market and customs union, while formally leaving both, it is unclear whether these UK proposals would be consistent with the ‘redlines’ the EU has established in order to maintain the integrity of the single market and the alignment of its trade policy with WTO rules. The potential for ‘terrible market turbulence’ which a poorly manage Brexit process could give rise to in the dairy sector is an issue of concern to ACP countries, since as Dairy UK and the EDA position paper highlights, the last time EU exporters lost access to 3rd country markets (the Russian import embargo) this saw a massive expansion in EU exports of milk powders to Africa. This has served to further undermine efforts to develop local milk-to-dairy supply chains in Africa. Read more “Dairy UK and the European Dairy Association (EDA) Launch Joint Position to Minimise Brexit Related Dairy Sector Disruptions”
Questionable Increase in Future EU Development Financing
Summary
An EC information note suggests the future multi-annual financial framework for EU external action programmes will see a 30% increase in the budget. However factoring in proposals to incorporate the EDF into the future multi-annual financial framework for EU external action programmes, suggests an almost 16% reduction in the real value of total EU external action programme expenditures in the coming period and even a small decline in planned expenditures in nominal terms. However it remains unclear where the burden of the reduced level of the EU’s planned expenditures in real terms will fall. Caribbean and Pacific ACP countries seem most likely to see a decline in grant financed development cooperation expenditures, while certain sub-Saharan African regions could see traditional development assistance activities down-sized as EU external action expenditures are more closely aligned with EU policy priorities along the West Africa-North Africa axis which plays a central role in migration flows. Read more “Questionable Increase in Future EU Development Financing”
Polish Poultry Sector Expansion Suggests Increased Exports to Africa Can be Expected
Summary
Investments in Polish poultry meat production continue, consolidating Poland’s position as the EU’s leading poultry producer (23% of the total). This is fuelling the growth in extra-EU poultry meat exports, with the rapid growth in Polish exports to sub-Saharan Africa in part being masked by the opening up of new export opportunities in neighbouring Ukraine. Given the lower production costs in Poland, this export growth is set to continue, with the prospect of a ‘hard’ Brexit likely to fuel the Polish quest for new markets beyond the EU’s borders. Read more “Polish Poultry Sector Expansion Suggests Increased Exports to Africa Can be Expected”