Summary
LDCs and all ACP countries who have in place Economic Partnership Agreements with the EU now have in place arrangements which will roll over existing DFQF access to the UK market. However the future value of this rolled over DFQF access will be determined by the MFN tariff regime which the UK government will apply either under a no-deal Brexit or at the end of any agreed transition period in UK/EU trade relations. While the UK government announced a ‘development friendly’ temporary no-deal Brexit tariff schedule in March 2019 (with this being slightly revised in October 2019), a full scale review of the UKs temporary MFN tariff schedule is planned from January 2020, with this involving a two month period of public consultations. Following on from this review it is anticipated the UK government will make an announcement on the long term MFN tariffs it plans to apply. It is only at this point that the future value of the rolled over DFQF access granted ACP countries will finally be known. The preferential duty free access rolled over for preferred ACP partner countries adds nothing to the competitive position of ACP exporters if all other competing suppliers also enjoy duty free access as a result of the elimination of MFN duties. Read more “Continued Duty Free Quota Free Access to UK Market Secured but the MFN Issue Looms”
Category: Sectors
Making Sense of Brexit What Does the Current Confusion Mean for ACP Agro-food Sectors
Summary
Despite a Parliamentary vote approving in principle the revised Withdrawal Agreement concluded between the UK and EU, efforts to ram the Withdrawal Bill through Parliament with minimum discussion and no amendments failed. This means uncertainty over the outcome of the Brexit process remains. While an extension to the article 50 process no looks inevitable, a ‘hard Brexit’ or even a ‘no-deal Brexit’ still looks most likely, with a ‘soft Brexit’ requiring a general Election which would result in a new government being installed which was committed to remaining in the EU customs union and single market. Despite having secured continued DFQF access to the UK market in the event of a ‘no deal Brexit’ ACP exporters will still need to address a range of issues if exports to the UK are not to be disrupted under either a ‘hard Brexit’ or a ‘no-deal Brexit’. A further extension of the article 50 period could provide time for ACP exporters to prepare to deal with potentially trade disruptive challenges, but this will require pro-active engagement from the concerned ACP exporters during the breathing space a further extension will provide. Read more “Making Sense of Brexit What Does the Current Confusion Mean for ACP Agro-food Sectors”
Exploring New Cross Channel Ferry Routes for ACP Exporters Serving UK Market via EU27 Countries
Summary
ACP exporters of short shelf life products serving the UK market via initial ports of landing in an EU27 member state will face significant challenges under a no-deal Brexit, despite the reconsolidation of duty free-quota free access to the UK market having been secured by all LDC and EPA signatory ACP countries. These ACP exporters will not only need to address the inevitable administrative challenges arising from the UK becoming a separate customs jurisdiction, but will also need to get to grips with the severe transportation disruptions a no-deal Brexit will give rise to along existing EU27/UK transportation corridors. ACP exporters using triangular trade routes will need to:
- ensure they are ready for inevitable administrative changes a no-deal Brexit will bring about (with new EORIs BOIs and BTIs being obtained where necessary);
- ensure valid certification and authorisations are in place and their exports remain compliant with labelling and marking requirement ;
- clarify the location and basis of SPS inspections of products traded along triangular supply chains (ACP/EU/UK) into the UK market;
- review and revise contractual arrangements for delivery of products to clients in the UK;
- take unilateral action to review and revise their current shipping arrangements for serving the UK market ;
- intensify dialogue with trade partners on how best to address specific Brexit related trade disruptions;
- explore the use of the new ferry services being set in place to address Brexit related transportation disruption focussed on the RORO cross channel routes centred on Kent;
- in some case seek out new direct routes to UK markets abandoning their existing triangular trade partnerships.
Arla Commits to Extended Dairy sector Cooperation in Nigeria
Summary
Arla has announced a new partnership for the promotion of local milk production in Nigeria as part of its Milky Way Partnership Nigeria initiative. However the focus on the development of commercially viable local milk supply chains needs to be seen against the background of the serious local constraints on the development of efficient milk-to dairy supply chains in Nigeria and the expansion and changing structure of EU milk powder exports which is delivering low priced milk powders to Nigeria for reconstitution into value added dairy products. The competitive pressure from imported milk powders is only likely to be exacerbated if a no-deal Brexit occurs which would inevitably disrupt existing EU27/UK trade in dairy products. Against this background it is highly unlikely that in the foreseeable future local Nigerian milk production will make any dent in the Nigerian dairy sector’s overwhelming dependence on imported milk powders for its dairy processing activities. Read more “Arla Commits to Extended Dairy sector Cooperation in Nigeria”
EU Needs to Tackle Toxic Pesticide Residues at Source by Banning Their Production in the EU
Summary
Press reports in Kenya have highlighted the continued export by EU companies of pesticide products banned for use in the EU. This gives rise to pesticide residues which lead to Kenyan products being prevented from entering the EU market. This is seen as incoherent, with calls being made for the EU to halt the production and export of pesticides which are no longer approved for use in the EU on hazardous to health ground. Currently commercial considerations play a significant role in whether re-approval is sought for specific products. Re-approvals for products which are out-of-patent are not generally sought, particularly when newer patented products are being placed on the market. Thus the absence of re-approvals does not necessarily point to a risk to human health. Clearly better dialogue processes are needed to resolve this incoherency, with, where appropriate for the protection of human health, this being extended to addressing the problems at source by banning production and export of pesticides harmful to human health. Read more “EU Needs to Tackle Toxic Pesticide Residues at Source by Banning Their Production in the EU”
EU Skimmed Milk Powder Stocks Empty, But for How Long?
Summary
While EU skimmed milk powder stocks are now empty, after five years of overhanging global markets, this respite could be short lived. A no-deal Brexit could so severely disrupt trade in the dairy sector that the EC would return to skimmed milk powder (SMP) intervention buying and support for private storage of SMP. As with the measures adopted in response to the August 2014 Russian import embargo this could give rise to market consequences and trade flows which undermine efforts to promote milk-to-dairy supply chains in ACP countries, particularly in West Africa. Against this background ACP governments will need to ensure they retain the trade policy space necessary to protect local markets from disruptions where initiatives to develop and sustain local milk-to dairy supply chains are underway. Read more “EU Skimmed Milk Powder Stocks Empty, But for How Long?”
EU’s Use of Pesticide Regulations Attacked in WTO as Trade Inhibiting
Summary
The EU has been challenged in the WTO on the use of its hazard-based approach to regulating pesticides, which it is claimed can constitute a non-tariff barrier to trade. The ACP Group has endorsed the US led challenge, which includes a request for the EU to review its current approach. The EU meanwhile has asserted its unwillingness to compromise the protection of human health. However the real issue relates to the design and application of EU pesticide residue controls and other import control requirement on agricultural products. It is in regard to design and application of EU import controls where more effective dialogues are required to ensure that while protecting human health no unnecessary barriers are created. While there is general agreement on this in principle the key area of contention is how to operationalise this approach in practice. At the ACP level there would appear to be a need for: greater pan-ACP cooperation in such policy dialogues with the EU; closer coordination between producer organisation, competent authorities and diplomatic representatives in Brussels; and enhanced coordination between ACP representatives in Brussels and Geneva in international fora and bilateral discussions with the EU. Read more “EU’s Use of Pesticide Regulations Attacked in WTO as Trade Inhibiting”
Tunisian Citrus Black Spot outbreak linked to Infected planting materials not trade in citrus fruit
Summary
Confirmation of citrus black spot infections on imports of fruit from Tunisia is being linked to the illegal importation of infected planting materials. While the outbreak suggests the infection can take root in Mediterranean production zones, it has no impact on the debate on whether trade in citrus fruit from South Africa can be a vector for disease transmission to citrus growing areas of the EU. The European Commission should continue to resist Spanish citrus producer pressure to include the Phyllosticta citricarpa infection as a ‘priority quarantine pest’, since its inclusion would carry serious trade consequences for ACP citrus exporters. Read more “Tunisian Citrus Black Spot outbreak linked to Infected planting materials not trade in citrus fruit”
The EU Mercosur Agreement Part 4 Will the Mercosur Agreement Pose a Threat to Belizean Orange Juice Exports?
Summary
Spanish citrus producers are concerned the new Mercosur trade agreement could flood the EU market with frozen orange juice concentrate. This potentially impacts on frozen orange juice exporters from Belize and South African, with this being of particular concern to Belize where these exports constituted 1.3% of total exports to the EU in 2018. The conclusion of the Mercosur agreement could give added importance to exploiting the ‘rolled-over’ CARIFORUM-UK ‘Continuity Agreement’, given the potential trade disruptions which could arise from a ‘no-deal’ Brexit for the export of reconstituted orange juice and domestic EU27 orange juice to the UK. Read more “The EU Mercosur Agreement Part 4 Will the Mercosur Agreement Pose a Threat to Belizean Orange Juice Exports?”
The EU-Mercosur Agreement Part 3: Will the Mercosur Agreement Pose a Threat to the Stability of EU27 Banana Markets
Summary
EU banana producers have expressed fears over the impact any EU-Mercosur banana tariff concessions could have on the level of banana imports from Brazil. Based on recent trends in EU banana imports in response to tariff reductions these fears have solid foundations. However from an ACP perspective such fears should not be overstated with the likely market effects of increased Brazilian banana exports to the EU needing to be seen in the context of all the wider sources of pressure on the EU market position of ACP banana exporters. Individual ACP banana exporters will need to evaluate the specific implications of any new Mercosur agreement tariff concessions for the particular EU banana market components they serve. Where necessary enhanced marketing and product differentiation strategies will need to be set in place in order to maintain their current export trade to the EU. However, it needs to be recognized this will not be possible for all existing ACP banana exporters. Read more “The EU-Mercosur Agreement Part 3: Will the Mercosur Agreement Pose a Threat to the Stability of EU27 Banana Markets”