Summary
Proposals for consolidated electronic document requirements for the movement of goods from the mainland UK to Northern Ireland could provide a basis for special arrangements to facilitate the continued smooth functioning of ACP triangular supply chains. Additional arrangements to remove the need for phytosanitary checks on ACP goods entering the UK market via EU27 countries would however be required. While there is seen as being no political objection in the UK to averting disruption of trade with developing countries which enters the UK market via EU27 member states, there is not currently the ‘band width’ in UK government services to deal with this issue, given Covid-19 related demands and the fraught state of UK/EU negotiations. There is therefore a need for the most directly affected ACP governments to launch a political initiative for the establishment of special arrangements to ensure the continued smooth functioning of ACP triangular supply chains. Such an initiative would need to reach out to both the UK and EU authorities to make sure suitable arrangements are in place along the whole of the supply chain. Read more “Could Leaked Requirements for Movement of Goods to Northern Ireland Provide Basis for Special Arrangements for ACP Triangular Supply Chains”
Category: Brexit
Emerging UK/EU Dispute Over ‘Green Box’ Payments Highlights Long-Standing ACP Concerns
Summary
The UK is objecting to the inclusion of a ‘peace clause’ in any future EU/UK trade agreement which would prevent the UK from challenging the trade distorting effects of EU ‘green box’ agricultural support payments. The trade distorting effects of EU ‘green box’ support payments, has long been a focus of discontent for ACP producers, who see the trade effects of these measures as grossly unfair. While the EU is unlikely to abandon its robust defence of the non-trade distorting nature of existing ‘green box’ payments, the accommodation reached with the UK on this issue could potentially hold important lessons for ACP governments seeking to defend domestic producers against unfair ‘green box’ support driven trade distortions. It would therefore be appropriate for ACP governments to closely monitor these UK/EU discussions. Read more “Emerging UK/EU Dispute Over ‘Green Box’ Payments Highlights Long-Standing ACP Concerns”
EU Figure Highlights Importance of UK Market to EU27 Poultry Sector
Summary
The UK is a major export market for EU27 poultry meat producers, in recent years taking 1/3 of extra-EU27 exports. In the absence of a UK/EU trade agreement which preserves duty free access on mutual trade in poultry meat, EU exporters would face standard MFN duties in exporting to the UK, while UK exporters would face standard MFN duties in exporting to the EU. If EU exporters faced the same tariffs as Brazilian exporters, then EU exporters of chilled and frozen chicken meat would rapidly be displaced from the UK market in most product areas. This would be likely to generate a substantial surplus of poultry meat on the EU market, for which markets would need to be found across the globe. This needs to be seen in the context of the current importance of African markets in total extra-EU poultry meat exports. Read more “EU Figure Highlights Importance of UK Market to EU27 Poultry Sector”
Deferment AfCFTA Implementation Leads to Sequencing Issues in Kenya US Trade Negotiations
Summary
The Kenyan President has announced trade negotiations with the USA will be delayed given the deferment of the implementation of the AfCFTA in the face of Covid-19 disruptions. This raises issues related to the UK governments approach to trade agreements with African countries such as Kenya. While substantive ‘face to face’ negotiations to resolve outstanding technical issues and regional concerns have not been possible since February the UK government continues to insist Continuity Agreements can be concluded by the end of 2020. While this is perfectly possible for an agreement which solely addresses UK concerns and interests, it is not possible for an agreement which addresses African regional complications and issues and concerns arising from the UK’s departure from the EU customs union. Comprehensively addressing these latter concerns is vital to ensuring continuity in African exports to the UK from 1st January 2021. Against this background the UK government should conclude qualified Continuity Agreements by the end of the year to preserve existing duty-free access for exporters from the concerned African countries, but with the implementation of reciprocal obligations being deferred until outstanding technical issues and regional concerns have been addressed. Read more “Deferment AfCFTA Implementation Leads to Sequencing Issues in Kenya US Trade Negotiations”
Commitment to Phasing in of UK Controls on Goods Entering from the EU Provides a Framework for Addressing ACP Triangular Supply Chains Issues
Summary
On 12th June 2020, the UK has announced there will be no extension of the transition period in UK/EU trade relations. At the same time, the UK announced plans for phasing in of border controls on imports from the EU. This phased approach is aimed at providing time for UK businesses to prepare for changes in border arrangements given the setbacks to preparatory activities generated by the Covid-19 pandemic. However, the underlying border controls challenges facing the UK government pre-dated the Covid-19 pandemic and remain substantial. Against this background ACP exporters using triangular supply chains need to intensify preparation for the implementation of new UK/EU border arrangements, while ACP governments will need to ensure their Continuity Agreements with the UK, fully address the need to ensure ‘continuity’ in the smooth functioning of triangular supply chains. The governments of least developed countries will also need to ensure a mechanism is found to make similar arrangements for the smooth functioning of triangular supply chains used by LDC based exporters. Read more “Commitment to Phasing in of UK Controls on Goods Entering from the EU Provides a Framework for Addressing ACP Triangular Supply Chains Issues”
Growing Cold Store Shortage Generating Further Additional Costs in Serving European Markets
Summary
The Covid-19 surge in demand for cold storage space is generating significant increases in cold storage charges and an absolute shortage of space in Europe. In the case of the UK this situation is being compounded by the growing prospect of a no-deal UK departure from the EU customs union. This will generate yet another cost increase for ACP agri-food exporters of fresh products which require cold storage before delivery to final customers. This suggests ACP exporters of products requiring cold storage need to shorten their supply chains through the establishment of arrangements for direct delivery of goods to final buyers. This would allow these ACP exporters to side-step the commercial costs of the worsening cold storage availability situation in not only the UK but elsewhere in Europe. Smaller ACP exporters may need to explore their options for accessing the ‘Airbnb’ model of cold store provision. Read more “Growing Cold Store Shortage Generating Further Additional Costs in Serving European Markets”
Grim Sugar Market Prospects Will Require Better ACP Marketing to Exploit Available Evolving Opportunities
Summary
The nascent recovery of the EU sugar market which was getting underway in the 2019/20 marketing year has been reversed by the Covid-19 pandemic. The collapse of global sugar prices is making raw cane sugar imports cheaper and EU sugar exports less competitive. While some ACP sugar exporters are increasingly focussed on trade into sugar deficit markets in the EU (region 3), where prices are on average stronger, these average prices mask large differences in contracted prices and between different contracted prices and spot market prices. This makes marketing strategies and contract negotiations critical to the overall revenue position of ACP sugar exporters to the EU market. Other ACP exporters remain dependent on the UK market where profound uncertainties are faced. The future basis for UK/EU trade and the arrangements for the management of the UK’s Autonomous Tariff Quota will be critical to future UK sugar market price developments. With the recessionary effects of Covid-19 likely to profoundly impact on sugar sector consumption and the structure of demand, ACP exporters will need to pay close attention to evolving policy developments and market conditions in the coming 6 months. Read more “Grim Sugar Market Prospects Will Require Better ACP Marketing to Exploit Available Evolving Opportunities”
Signs of Recovery in the EU Floriculture Sector but Air Freight Challenges Overhang East African Cut Flower Exports
Summary
There is an urgent need for a coordinated East Africa-EU air freight corridor recovery initiative. The Dutch government needs to take a lead on this in Europe, given the central role of the Netherlands in the air freighted floriculture and horticulture trade between East Africa and the EU. This is a critical sector in East Africa’s trade with the EU, with the Covid-19 pandemic threatening to undo 20 years of sustained improvements in livelihood opportunities and poverty focussed growth. Such an initiative should include immediate measures involving: waiving competition policy requirements; opening up the EU’s ‘green lane’ National Contact Point Initiative to East African exporters to rapidly address logistical challenges faced both with new and existing air freight services; waiving phytosanitary inspection fee and lowering landing fees for the duration of the pandemic; and financial support measures to expand regionally focussed air freight capacity. Such measures would be wholly consistent with the EC’s Covid-19 recovery plan, which emphasises how ‘in the longer-term, the EU will only successfully recover if our partners around the world also recover’. Read more “Signs of Recovery in the EU Floriculture Sector but Air Freight Challenges Overhang East African Cut Flower Exports”
Ghanaian Exports to the UK and the Outcome of the UK’s MFN Tariff Review
Summary
Despite earlier fears over the potential impact of the UK’s MFN tariff review the proposed future schedule has largely left unaffected MFN tariffs on agri-food products of export interest to Ghana. The principal issues now faced will arise if the UK leaves the EU customs union on 1st January 2021. These issues relate firstly to the how the Government of Ghana can retain duty free-quota free access to the UK market after this date. Secondly, the prospect a no-deal UK exit from the EU customs union seeing the UK radically revise its’ proposed MFN tariff schedule so as to avert high food price inflation during a severe Covid-19 induced economic recession. Read more “Ghanaian Exports to the UK and the Outcome of the UK’s MFN Tariff Review”
Kenyan Exports to the UK and the Outcome of the UK’s MFN tariff Review
Summary
Despite earlier fears over the potential impact of the UK’s MFN tariff review the proposed future schedule has largely left unaffected MFN tariffs on agri-food products of export interest to Kenya. The principal issues now faced relate to the future of Kenya’s duty free-quota free access to the UK market if the UK leaves the EU customs union on 1st January 2021, given the Covid-19 interruption of still incomplete regional trade negotiations; the need to ensure the continued smooth functioning of triangular supply chains through which the UK market is served via initial ports of landing in the Netherlands or Belgium and the future phytosanitary import controls to be applied by the UK, once the UK is no longer bound by the EU’s increasingly strict phytosanitary import regime. Read more “Kenyan Exports to the UK and the Outcome of the UK’s MFN tariff Review”