Summary
During the July 2017 visit of UK Secretary of State Lord Price to Southern Africa a commitment was made to replicating current market access arrangements post-Brexit. However it remains unclear how this to be achieved. The transitional extension of existing reciprocal preferences could not only face serious opposition from WTO members but would be far from a simple ‘technical exercise’. New rules of origin which took account of the UK’s departure from the EU agreement would be essential, in order to establish which products qualified for ‘originating status as UK products. The alternative would amount to an absence of rules or origin. Either would be a substantive modification of the existing terms of the UK’s export trade. The future of Tariff rate Quota (TRQ) arrangements under the EU agreement would also need to be resolved in the immediate post Brexit period. Looking to the longer term, there are a multiplicity of non-tariff issues related to post-Brexit UK trade and agricultural policies which give rise to profound uncertainties over the future value of any post Brexit preferential trade arrangement with the UK for certain SACU members. Many of these uncertainties will need to be addressed before the future value of a bilateral trade deal with the UK can be fully assessed. Read more “DIT SACU Discussions to Extend Current Access to the UK Market More than a Technical Exercise”
Category: Brexit
Dominican Republic and West Africa lead way in growth in ACP Mango exports to the EU
Summary
ACP exports of mangoes to the EU have grown strongly, particularly since 2007, with further growth in EU consumer demand likely. While tariffs are not an issue in the mango sector, new trade agreements do appear to have boosted investment and facilitated expanded exports in both ACP and non-ACP countries in response to rising EU demand. Brexit is unlikely to pose any challenges for direct ACP mango exports to the UK, but could lead to problems if the absence of a UK-EU27 agreement, spills over into reduced cooperation on SPS and freight forwarding arrangements. This is important in the mango sector given the role the Netherlands plays in the re-export trade across the EU, including to the UK. This issue needs to be closely monitored by those ACP exporters which are most likely to be affected. Read more “Dominican Republic and West Africa lead way in growth in ACP Mango exports to the EU”
Salient points for the ACP from a review of legal implications for the agro-food sector or Brexit
Summary
In the agro-food sector the repeal of the 1972 European Communities Act could leave a legal vacuum with regard to EU rules set in place through regulations which were directly applicable. This includes, for example, rules governing food safety and import inspection and control systems. Legal uncertainty could impact on sourcing practices of UK retailers. There would appear to be a need for ACP exporters to ‘look out for things that have been missed’ in the sphere of agro-food sector trade. The ACP may well need to make a political issue of ensuring legal certainty in all areas affecting UK imports of agro-food products, with collaboration with the UK Fresh Produce Consortium potentially offering a cost effective means of getting to grip with this issue. Read more “Salient points for the ACP from a review of legal implications for the agro-food sector or Brexit”
Pacific sustainable palm oil supply chains could face disruption from Brexit
Summary
A market positioning strategy has been adopted by Pacific island palm oil producers focused on the supply of fully traceable sustainably certified palm oil through a dedicated facility in the UK which then serves the whole of the EU28 market for fully traceable sustainable palm oil. Any failure to conclude an UK-EU27 trade agreement by 30 March 2019 could see a re-imposition of tariffs by the EU27 on Pacific palm oil processed in the UK. This could disrupt the functioning of existing Pacific palm oil supply chains and compound the challenges being faced by Pacific palm oil suppliers as a result of environmental and health campaigns in the EU against the use of palm oil in food products. Read more “Pacific sustainable palm oil supply chains could face disruption from Brexit”
UK WTO representative seeks to clarify future UK trade treatment of developing countries
Addendum to Article
‘UK government commits to extending EBA access for LDCs post Brexit’
Following on from the 24th June 2017 UK government statement entitled ‘Government pledges improved post-Brexit access to UK markets for world’s poorest countries’(1), the UK representative to the UN and Other International Organisations in Geneva sought to clarify UK policy towards non-LDC developing countries. In a letter to fellow representatives to the UN, which was copied to WTO Director General Roberto Azevedo, Julian Braithwaite declared the UK government’s commitment to ‘avoiding disruption for our trading partners as we leave the European Union’. It was stated ‘the UK has decided to replicate its existing trade regime in the WTO in new UK-only schedules’. This was announced on response to questions from WTO members as to ‘what will happen to the nearly £20 billion of exports to the UK from developing countries who benefit from special tariff preferences’. Read more “UK WTO representative seeks to clarify future UK trade treatment of developing countries”
UK government commits to extending EBA access for LDCs post Brexit
Summary
The UK has committed to extending in the immediate post-Brexit period the non-reciprocal duty free access granted LDCs under the EU’s current EBA initiative. However action was expected given the long standing UK support for duty free-quota free (DFQF) access for LDCs. The issue has always been whether current DFQF access enjoyed by ACP non-LDCs would be extended from 30th March 2019. This issue remains unclear, with the UK government solely making a commitment to explore options for maintaining existing trade arrangements. Read more “UK government commits to extending EBA access for LDCs post Brexit”
ACP rice exporters and Brexit
Summary
In terms of trade with the EU the UK is not a major market for ACP rice exporters. However the impact of the UK’s departure from the EU on ACP rice exporters will not be felt via changes to UK rice import tariffs, but rather as a result of the increased competition on the smaller EU27 market, where the departure of the UK will reduce overall EU rice import demand by around 23% while the EU’s TRQ market access commitments under existing bilateral agreements will remain unchanged. The removal of UK import demand is also likely to exacerbate the competitive challenges which ACP rice exporters face as a result of the DFQF access granted to LDC rice exporters to the EU. This measure saw imports from the main LDC rice exporters to the EU increase from under 7,500 tonnes in 2007 to around 500,000 tonnes in 2015 and 2016. Read more “ACP rice exporters and Brexit”
ACP Citrus Exporters and Brexit: Part 2, The Case of Smaller Scale Exporters
Summary
In the short term smaller ACP citrus exporters could benefit from Brexit in their trade with the UK if they can:
- retain existing duty free-quota free access to the UK market from the date of the UK’s departure from the EU;
- secure the removal of CBS controls in trade with the UK;
- ensure the issue of the disproportionate costs of SPS inspections for small scale ACP exporters under moves to full costs recovery is addressed
However this will still leave the threat posed the dismantling of all tariff protection in the citrus sector, where the UK has no domestic production. This however may be deferred if it only takes place in the context of UK FTA negotiations with non-ACP exporters of citrus fruit. Read more “ACP Citrus Exporters and Brexit: Part 2, The Case of Smaller Scale Exporters”
ACP citrus exporters and Brexit: Part 1 The Case of South Africa
Summary
For South Africa both challenges and opportunities arise in the citrus sector as a result of the Brexit process. The first challenge, in common with other ACP citrus exporters, is to retain existing preferential access to the UK market. South Africa could also benefit from the dismantling of strict CBS controls on exports to the UK. Unlike other ACP citrus exporters, South Africa could also gain some marginal benefits from the immediate removal of current seasonal tariffs on its citrus exports. However, securing these benefits will be dependent on the UK pursuing a ‘hard Brexit, which may now be less likely following the UK June 2017 election result. In addition, if no new trade arrangement is set in place between the UK and EU27 from 30th March 2019 and MFN duties are imposed on mutual trade, South Africa could see new market opportunities emerge in the citrus sector in trade with the UK, given Spain’s current role as the dominant supplier to the UK. These opportunities however will exist only on the fringes of the existing season. Read more “ACP citrus exporters and Brexit: Part 1 The Case of South Africa”
ACP banana exporters and Brexit
Summary
Brexit is likely to give rise to 3 distinct challenges for ACP banana exporters: retaining preferential access to the UK market; dealing with the market consequences of a possible abolition of duties on banana imports into the UK; dealing with the increased competition on EU27 markets as a result of the application of banana sector TRQs under bilaterally negotiated EU FTAs. While to date overall ACP banana exporters have expanded their exports to the EU28 despite expanded TRQ access for $ banana suppliers, the situation varies greatly between different ACP exporters. With Caribbean small island banana exporters largely being squeezed out of EU markets since 2007. However, the past strong trade performance of some ACP banana exporters since 2007 is no guarantee of future competitiveness. Market adjustment support may be required to ACP producers and exporters in adjusting to the market consequences of Brexit in the banana sector. The EC will also need to take account of the impact of expanded TRQ access on ACP banana suppliers in its application of the stabilisation mechanism set in place to protect EU banana producers. Read more “ACP banana exporters and Brexit”