Summary
If the EU no longer carries out necessary phytosanitary checks on plants and plant products imported into the UK via EU27 member states, the UK will need to apply standard 3rd country phytosanitary controls to ACP plant products exported to the UK via a EU27 member state. The application of standard 3rd country phytosanitary controls along ACP triangular supply chains could prove disruptive given the UK government’s current planned system of controls. These controls are seen as commercially non-viable by operators involve in current triangular supply chain arrangements. There is therefore an urgent need for ACP governments whose exporters are involved in triangular supply chains involving the affected products to secure from the EU authorities a firm commitment that necessary plant health checks on products destined for the UK market will continue to be carried out in the EU27. Read more “UK Procedures for SPS Inspections of Plant and Plant Products under a No-Deal Brexit”
Category: Brexit
EU Council Agrees Article 50 ‘Flextension’ Until 31st October 2019
Summary
The EU Council has agreed an extension of the Article 50 process until 31st October 2019. The UK will be bound by the same rights and obligations as other EU members during this period. This extension period could come to an end earlier if the Withdrawal Agreement is ratified. In this context while there is now time to find a negotiated position this would require: ratification of the Withdrawal Agreement; revising the UK’s whole Brexit strategy or revoking Article 50. This will hinge solely around political developments in the UK. The prospect of a ‘no-deal Brexit’ remains, with critical decision points relating to the conduct of European Parliament elections in the UK, and the June 21st EU Council review of the Brexit process. In addition a ‘no-deal Brexit’ or a ‘hard Brexit’ could still occur on the 31st October 2019. Against this background ACP EPA signatories will still need to retain the option of signing Continuity Agreements with the UK if a ‘no-deal Brexit’ looks imminent. Even under a ‘hard Brexit’ ACP governments would need to address the range of issues identified as requiring the inclusion of a detailed “Annex of Concerns” in each of the concluded Continuity Agreements. This will be vital to ensuring both a smooth transition to post-Brexit trade relations with the UK and the future value to ACP exporters of the rolled over tariff preferences which Continuity Agreements seek to enshrine in ‘UK only’ trade agreements with ACP countries. Read more “EU Council Agrees Article 50 ‘Flextension’ Until 31st October 2019”
Pressure Mounts on Cameroon, Ghana and Cote d’Ivoire to Sign UK Continuity Agreements to Protect Banana Exporters
Summary
Ecuador, Colombia and Peru are set to sign a Continuity Agreements with the UK, thereby ensuring continued reduced duty access to the UK market for their banana exporters. These Andean Pact countries accounted for 43.6% of UK banana imports and alongside the Continuity Agreement concluded with CARIFORUM countries ensures a continuation of current terms and conditions for banana imports which, in 2017 accounted for almost 64% of total UK banana extra-EU imports. This increases pressure on Ghana, Cameroon and Cote d’Ivoire to speedily conclude Continuity Agreements with the UK in the event of a no-deal Brexit. Any imposition of UK MFN tariffs would undermine the commercial position of African banana exporters, de facto amounting to a 15.4% import tax on bananas from the main African exporting countries. Read more “Pressure Mounts on Cameroon, Ghana and Cote d’Ivoire to Sign UK Continuity Agreements to Protect Banana Exporters”
South Africa to Take EU to WTO Dispute Settlement over Citrus Black Spot Controls
Summary
Press reports suggest the South Africa is planning to pursue a case at the WTO over the EU’s trade restrictive use of Citrus Black Spot (CBS) related SPS measures. However this may be aimed at bringing into the public domain the scientific basis for EU CBS controls. This would then provide a more solid basis for the negotiation of a reduction in the severity of these commercially expensive controls. This could side step some of the political pressures which any for a wider review of EU SPS controls would generate. However structural changes in the Spanish citrus sector look likely to intensify producer pressures for import restrictions unless the functioning of citrus supply chains can be improved to the benefit of Spanish producers. While scope will exist under a no-deal Brexit for a review of UK CBS controls it is unclear whether the stalled Continuity Agreement negotiations are covering these phytosanitary issues. The UK government faces severe capacity constraints in this area of policy dialogue; constraints which are only likely to get more severe under a no-deal Brexit scenario. Read more “South Africa to Take EU to WTO Dispute Settlement over Citrus Black Spot Controls”
How Would ACP Least Developed Countries Be Impacted by a 12th April No Deal Brexit?
Summary
The ending of the two year notification period set out under Article 50 of the EU Treaty alongside the House of Commons rejection of the Withdrawal Agreement for a 3rd time, leaves the Brexit process on borrowed time. The UK government will now have to submit an alternative way forward in the Brexit process if a no deal Brexit is to be avoided on the 12th April 2019. While this may include a longer extension of the Article 50 period beyond the 2 weeks the EU Council has currently granted, the prospect of a no-deal Brexit on 12th April cannot be ruled out. This is despite a huge 240 Parliamentary majority against the UK leaving the EU without a deal. While a no-deal Brexit will not impact on the duty free quota free access which LDCs enjoy to the UK market, where the UK government has committed to rolling over the existing EU preferential system for LDCs as a unilateral UK trade arrangement, a wide variety of non-tariff related issues will also need to be addressed. If these issues are not comprehensively addressed then current trade flows from LDCs could be disrupted in the short term while in the longer term the value of the duty free-quota free access enjoyed could be undermined by changes in the UK’s independent MFN tariff regime. In addition there are a range of UK trade policy issues which need to be addressed if trade with least developed countries is to become a tool for wider poverty focussed sustainable development in LDCs. Most notably in this regard are the rules of origin and SPS control requirements to be applied by the UK to imports from LDCs. Read more “How Would ACP Least Developed Countries Be Impacted by a 12th April No Deal Brexit?”
Which ACP EPA Signatory Countries Would be Most Vulnerable to a 12th April No Deal Brexit?
Summary
With the ending of the two year notification period set out under Article 50 of the EU Treaty and the House of Commons having rejected the Withdrawal Agreement for a 3rd time, the Brexit process is on borrowed time. The UK government will now have to submit an alternative way forward in the Brexit process if a no deal Brexit is to be avoided on the 12th April 2019. While this may include a longer extension of the Article 50 period beyond the 2 weeks the EU Council has currently granted, the prospect of a no-deal Brexit on 12th April cannot be ruled out, despite a huge 240 Parliamentary majority against the UK leaving the EU without a deal. Against this background, after providing an update on the Brexit process in the UK, this article reviews the situation of ACP countries and regions which currently trade with the UK under an EU EPA. Read more “Which ACP EPA Signatory Countries Would be Most Vulnerable to a 12th April No Deal Brexit?”
UK Signs Continuity Agreement with Caribbean ACP Countries
Summary
On 22nd March 2019 the UK government signed a Continuity Agreement with representatives of a number of Caribbean ACP governments. The UK government press release highlighted the benefits of the agreement to Caribbean banana, sugar and rum exporters. While the agreement leaves Caribbean signatories well placed to exploit expanded market opportunities which a no-deal Brexit would give rise to, these benefits could rapidly disappear. The UK government is committed to a wide ranging review of its temporary MFN tariff schedule within 12 months of a no-deal departure from the EU. It is essential for Caribbean Continuity Agreement signatories to ensure existing MFN duties for bananas and sugar remain in place in the medium to long term. Important issues related to the functioning of triangular supply chains and the future of autonomous UK phytosanitary controls linked to UK agro-climatic conditions also need to be addressed. In light of these issues there is a need to attach an “Annex of Concerns” to the newly conclude UK-Caribbean Continuity Agreement. This should set out both areas where the rolled over provisions of the existing EPA can and should be improved to enhance Caribbean exports trade and where additional agreements are needed to preserve continuity of current flows, including triangular trade flows. Read more “UK Signs Continuity Agreement with Caribbean ACP Countries”
Brexit Delayed but No Deal Brexit Still on the Table
Summary
While the UK has sought an extension of the Article 50 process, the EU Council has limited the duration of the extension granted, with this being conditional on approval of the Withdrawal Agreement. Failure of the UK Parliament to approve the Withdrawal Agreement would require an alternative way forward to be identified if the UK was not to leave under a ‘no-deal’ scenario on 12th April. While the UK’s unilateral EBA style trade regime for LDCs and the signing of a ‘Continuity Agreement’ will ensure continuity in tariff treatment for access to the UK market, these agreements will not on their own ensure continuity in trade flows nor continuity of the value of current ACP DFQF access beyond June 2020. For this to be achieved both additional special arrangements will need to be set in place immediately upon the UK’s withdrawal and a multiplicity of supplementary commitments will be required from the UK government if the current value of ACP trade arrangements with the UK is to be preserved and enhanced. Read more “Brexit Delayed but No Deal Brexit Still on the Table”
Trends in the EU Rice Market and the Potential Impact of Brexit on ACP Rice Exports
Summary
While 6 ACP countries export rice to the EU, this trade is wholly dominated by Guyana and Suriname. The unit value of Guyanese and Surinamese rice exports to the EU has fallen 23% and 30% respectively between 2012 and 2017. This needs to be seen in the context of the granting of fully duty free-quota free access to LDC rice exporters from 2009 and the reduction of the EU intervention price for rice and shift over to direct aid payments to EU rice producers in 2013. Despite the price decline Guyana exported 31% more rice to the EU market in 2017 than 2007. Up to 2030 EU rice imports are projected to increase 16.7%, although this does not factor in the withdrawal of the UK from the EU. The UK takes 22.7% of total EU rice imports and 12.4% of rice imports from ACP countries. The UK’s withdrawal would impact on the EU’s TRQ based managed trade regime for rice, since such imports would then be concentrated on EU27 markets. What is more any moves by the UK to abolish current MFN tariffs on rice given the absence of domestic UK production would greatly intensify competition from Indian and Thai rice exporters, potentially pushing Guyanese and Surinamese rice exporters entirely out of the UK market. Read more “Trends in the EU Rice Market and the Potential Impact of Brexit on ACP Rice Exports”
Fiji and Papua New Guinea Sign onto Continuity Agreements with the UK
Summary
While the concluded Continuity Agreement with Fiji and PNG preserves current duty free quota free access to the UK market under a no-deal Brexit scenario, it provides only temporary assurances on the maintenance of the value of these rolled over tariff preferences. The UK’s no-deal Brexit MFN tariffs announced on 13th March, will only last up to12 months after the UK’s departure from the EU, with a substantive tariff review being conducted during this period. In addition the existing Continuity Agreement fails to take account of the scope for improving the current rules of origin applied to Pacific island exports which could open up substantial new export opportunities in a context where the regions export trade with the UK has been in decline in recent years. In this context there would appear to be a need to attach an “Annex of Concerns” to the newly conclude UK-Pacific Continuity Agreement, setting out areas where the rolled over provisions of the existing EU EPA can and should be improved and where additional agreements are needed to preserve and enhance current trade. Read more “Fiji and Papua New Guinea Sign onto Continuity Agreements with the UK”