Summary
The deferment of the implementation of EU’s new organic regulation offers a precedent for addressing the commercial losses ACP organic exporters face if there is no EU/UK organic equivalence agreement in place by 1st January 2021. The lapsing of EU/UK mutual recognition of organic certification on 3rd country products should be deferred until the end of the Covid-19 pandemic plus 9 months, given the travel restrictions and social distancing requirements which complicate the securing of UK or EU27 specific organic certification at the present time. This would avert needless commercial losses for ACP organic exporters and encourage the continued growth in ACP organic exports, which are wholly consistent with both EU and UK sustainability objectives. Read more “Implementation of New EC Organic Products Regulation Postponed but Unresolved Brexit Issue Threatens Commercial Gains of ACP Organic Production”
Category: Southern Africa
Greenpeace Highlights Trade Policy Payback for Tate & Lyle Sugar for Brexit Support
Summary
Greenpeace has drawn a link between Tate & Lyle Sugars support for Brexit an the 260,000 duty free autonomous quota for sugar established by the UK government, suggesting this trade measure, which will solely benefit Tate & Lyle Sugars, is a reward for earlies political support. Greenpeace believes it will encourage imports of environmentally damaging sugar, mainly from Brazil and harm existing ACP/LDC sugar exporters, while NFU and British Sugar believes it will harm domestic UK sugar beet producers. The effects of the ATQ however will be determined by choices made by the UK government, namely whether it conclude an FTA with the EU and whether the ATQ is used solely as a market stabilisation mechanism or becomes an integral part of the supply equation. These two choices will determine whether less efficient ACP sugar exporters are driven out-off the UK market and the income gained by the remaining ACP suppliers. Read more “Greenpeace Highlights Trade Policy Payback for Tate & Lyle Sugar for Brexit Support”
Road Haulage Issues Likely to be Critical Bottleneck Along ACP Triangular Supply Chains from 1st January 2021
Summary
The scale of the road transportation disruptions along EU/UK supply routes as a result of the UK’s departure from the EU customs union and single market and the consequent creation of border controls are increasingly becoming apparent. The main impact will be unaffected by the outcome of the ongoing EU/UK negotiations. Against this background ACP exporters currently using triangular supply chains may have little choice but to move over to direct exports to final destination markets or the abandonment of markets in the UK, mainland EU or the Republic of Ireland currently served along triangular supply chains. Read more “Road Haulage Issues Likely to be Critical Bottleneck Along ACP Triangular Supply Chains from 1st January 2021”
UK Abrogation of Withdrawal Agreement Commitments Heightens Danger of a No Deal UK Departure from the EU Customs Union and Single Market
Summary
The UK governments’ decision to breach substantive provisions of the Northern Ireland Protocol to the jointly agreed Withdrawal Agreement threatens to make ratification of any EU/UK agreement which may still be concluded extremely difficult. It increases the prospect of an acrimonious no-deal UK departure from the EU customs union and single market at the end of 2020. While the scope exists for policy measures to minimise the negative impact of a no deal UK departure on ACP exports, the window of opportunity for taking these necessary measures is rapidly closing. The absence of appropriate policy intervention will leave ACP exporters alone in facing the cost increasing challenges of a no-deal UK departure will generate. Not all current ACP exporters will be able to adjust to these new commercial realities, with all but the largest and best prepared ACP exporters being squeezed out of UK and some EU27 markets. Read more “UK Abrogation of Withdrawal Agreement Commitments Heightens Danger of a No Deal UK Departure from the EU Customs Union and Single Market”
Cut Flowers Sector Concerns Over Proposed UK Border Controls Highlighted
Summary
The adverse effects of shortcoming in the UK’s approach to establishing border controls on goods entering from the territory of the EU on the cut flower trade has been highlighted. Information essential to the future conduct of this trade is still not available. Shortcomings in the design of administrative requirements and a general lack of business preparedness have also been highlighted. What is more, multiple freight issues arising from the creation of the new UK/EU border are also likely to severely impact the cut flower sector, with these posing particular problems for the triangular supply chains ACP exporters’ work through. Solutions to facilitate the continued smooth functioning of cut flower triangular supply chains are urgently needed. The outlines of such solutions are now emerging. They need to be actively pushed for by the concerned ACP governments and exporters, in association with Dutch cut flower industry in a context where there is limited ‘band-width’ in the UK and EC for dealing with triangular supply chain issues. Read more “Cut Flowers Sector Concerns Over Proposed UK Border Controls Highlighted”
UK Launches Consultation on its 260,000 Tonne Autonomous Tariff Quota for Raw Cane Sugar Imports
Summary
The UK government has launched a public consultation on its new 260,000 tonnes duty free sugar ATQ. A critical issue will be how the UK manages the ATQ. Given the profound uncertainties around the future supply situation on the UK sugar market arising from the unresolved EU/UK trade negotiations a strong case exists for the adoption of a carefully managed application of the sugar ATQ, with its deployment being regulated to prevent both the emergence of supply surpluses or supply deficits on the UK market in the course of 2021. Such an approach would be beneficial to both ACP/LDC sugar exporters and domestic UK sugar beet producers and processors and could also support the attainment of public health policy objectives, if it was used to foster a gradual increase in UK sugar prices. Two complicating factors however exist, namely: the depth of the impending Covid-19 recession in the UK and the serious commercial challenges facing Tate & Lyles Sugar, which desperately needs to expand the capacity utilisation of its Thames refinery in the context of more remunerative market prices for sugar. The question arises as to whether the experience and capacity exists in the hard pressed UK government administration for the nuanced and sophisticated management of the new sugar ATQ. Read more “UK Launches Consultation on its 260,000 Tonne Autonomous Tariff Quota for Raw Cane Sugar Imports”
How Helpful is the ECs Orientation in EU Trade Policy Review Consultation in addressing Post Covid-19 Recovery Challenge in ACP Countries?
Summary
The EU consultation note on the revision of its trade policy in light of recent developments, has introduced the concept of ‘Open Strategic Autonomy’ as a model for the design and future implementation of EU trade policy. This concept is designed to allow the EU greater policy space in defending EU economic and trade interests, while allowing the EU to more forcefully pursue its long standing policy of preferentially opening up 3rd country markets to EU exports. This is to be realised through the activities of the newly established EU Chief Trade Enforcement Officer. This approach could carry serious implications for the implementation of the ACP EPAs, agreed with the EU as long ago as 2007. It could limit the active use of established trade policy measures in support of post Covid-19 recovery. This despite the relevance of the initial Strategic Autonomy concept to the post Covic-19 socio-economic recovery needs of ACP counties. Current realities in ACP countries require the maintenance and expansion of policy space for measures to reduce the economic vulnerability and enhance the economic resilience of ACP countries. This suggest a need to subordinate the definition and enforcement of EPA commitments to the strategic autonomy needs of ACP countries, defined in light of their specific Covid-19 revealed vulnerabilities. Read more “How Helpful is the ECs Orientation in EU Trade Policy Review Consultation in addressing Post Covid-19 Recovery Challenge in ACP Countries?”
Preparing for the Impact of a New EU/UK Border on ACP Exports to the EU
Summary
This article seeks to highlight the main areas of impact of the new EU/UK border arrangements as these are likely to affect ACP exporters serving EU27 markets. While this will mainly impact ACP exporters using triangular supply chains, it will also have some effects on direct exports to the EU, mainly via it effects on trade administration documentation requirements, the need for valid authorisations and certifications, customs and taxation rules and the rules of origin requirements under preferential trade agreements. While ACP exporters themselves need to make their own assessments of the impact of the UK’s full withdrawal from the EU and set in process appropriate preparations for the changes which will occur, there is some scope for policy interventions to try and mitigate the adverse impact on ACP supply chains. However, this will require proactive engagement with the EU by the governments of the country’s most seriously impacted by the impending changes. To date there is no evidence the concerned government have yet appreciated the urgency of such policy initiatives. This could leave ACP exporters having to cope alone with further trade disruptions. This is likely to be most severely felt by those ACP exporting countries already suffering most severely because of Covid-19 related trade disruptions. Read more “Preparing for the Impact of a New EU/UK Border on ACP Exports to the EU”
Nestlé Move Away from Cane Sugar Compounds Wider Sugar Sector Demand Trends
Summary
Nestle’s decision to switch to beet sugar will have a greater impact on the UK market for ACP cane sugar than the companies sugar reduction efforts since 2015. The decision of Nestle will compound the wider structural trend in the UK and elsewhere in Europe towards a reduction of human consumption of ‘hidden’ sugars. While to date, as part of its latest anti-obesity campaign launched in the face of the devastating link uncovered between obesity and serious Covid-19 infections and deaths, the UK government has resisted pressured to extent the SDIL to high sugar content food products, pressure for regulatory measures to reduce the use of ‘hidden’ sugar in a wide range of food products is only likely to increase in the coming years. The long-term structural trends towards reduced consumption of sugar and greater local sourcing, is something ACP cane sugar exporters will need to adjust to, as they look towards their future marketing options. The ability of different ACP exporters to adjust to these new market realities varies greatly and will need to be assessed country by countries and even company by company. Read more “Nestlé Move Away from Cane Sugar Compounds Wider Sugar Sector Demand Trends”
Will ACP Exports to the UK Be Impacted by the New UK-EU Border Control Requirements?
Summary
While the UK government asserts the introduction of UK border controls on goods entering from the EU will leave trade with ACP countries and the rest of the world unaffected, this is not entirely the case. ACP goods entering the UK market via EU27 member states along so-called triangular supply chains, will be most severely affected, though be it in a wide variety of ways. This will depend on:
- The nature of product and whether any significant alteration to the product takes place in the territory of the EU on route to the UK, specifically whether the consignment is simply broken down or undergoes repackaging or some simple level of processing prior to onward trade to the UK.
- Whether the product remains formally ‘in transit’ under the provisions of the CTC.
- Whether the good enters the customs territory of the EU prior to onward movement to the UK.
- The basis on which the UK finally leaves the EU customs union and single market.
- The efficiency of UK border control services and border clearance infrastructure in the face of the basis on which the UK leaves the EU customs union and single market.
All these factors will influence the impact the UK’s departure from the EU customs union has on ACP exports to the UK. In addition even direct ACP exports to the UK will be affected by the new UK/EU border requirements, in terms of the trade documentation required to enter the UK customs area and the overall efficiency of UK border control services, in the face of the new demands a UK/EU border will generate. ACP exporters will need to be alert to and prepare for all these potential impacts, with the level of adjustment required varying considerably across products. Read more “Will ACP Exports to the UK Be Impacted by the New UK-EU Border Control Requirements?”