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?”
Category: EU trade policy
Implications for ACP Exporters of Further Reductions of Import Tariffs on Ecuadorian Bananas
Summary
At the beginning of 2020 Ecuador secured the benefits of the tariff reductions included in the EU-Andean Pact FTA. Ecuadorian exporters believe this will further stimulate banana exports to the EU, in a context where Ecuador already accounts for 1 in 4 bananas imported to the EU. It is unclear what the impact of the Covid-19 pandemic will be on Ecuador’s banana export trade to the EU. The Ecuadorian experience highlights the importance of the tariffs applied to banana imports on trade flows. In this context two issues arise for African banana exporters, namely: the future MFN tariffs the UK plans to apply to banana imports after it has left the EU customs union and whether the UK will unilaterally roll over existing duty free access for Ghanaian, Cameroonian and Ivorian banana exports, given the Covid-19 interruptions of ongoing negotiations on ‘UK-only’ Continuity Agreements which were intended to replace the EU trade agreement which will lapse once the UK leaves the EU customs union. African banana exporters have actively made their economic development concerns known to the UK government. It remains to be seen just how the UK government will respond to these concerns. Read more “Implications for ACP Exporters of Further Reductions of Import Tariffs on Ecuadorian Bananas”
Criticisms of New Rainforest Alliance Banana Certification Standards Highlights Centrality of Price Issues to Sustainability Efforts
Summary
The new Rainforest Alliance certification standard has been criticised by Latin American banana producers for failing to get to grips with the structural problems of cost and revenue distribution along the supply chain. While Rainforest Alliance is keenly aware of the problem, it holds certification alone cannot solve this structural imbalance. Rainforest Alliance is therefore looking to use other tools to leverage changes in cost and revenue distribution along banana supply chains. This could usefully focus on ensuring the inclusion of provisions on cost and revenue distribution in any EU ‘Green Deal’ regulatory initiatives aimed at promoting compliance with environmental and climate change concerns, and their coordinated implementation alongside the EU’s Unfair Trading Practices regulation. This could provide a means of getting to grips the long-term structural concerns of banana producers. Read more “Criticisms of New Rainforest Alliance Banana Certification Standards Highlights Centrality of Price Issues to Sustainability Efforts”
What Options for Strengthened EU Regulatory Requirements Would Best Serve the Interests of African Cocoa Farmers?
Summary
Some form of EU regulatory initiative to promote more sustainable and child labour free cocoa production in the course of 2021 now looks inevitable. The question arises: what form should such regulatory action take, if it is to support the attainment of a decent living wage for cocoa producers? This is a critical question since poor prices and heightened poverty levels have an important bearing on the use of child labour and the pursuit of environmentally damaging cocoa farming practices. A combination of initiatives founded on bilateral cocoa supply chain agreements between the EU and cocoa exporting countries, linked to the subsequent formulation of due diligence requirements and appropriate modifications to EU competition law, all aimed at addressing the low prices paid to farmers and ensuring net gains to the financial position of farmers as a result of the implementation of environmental and forest protection measures as well as the ending of the use of child labour, would appear to offer the greatest scope for effective action in addressing shared concerns. Read more “What Options for Strengthened EU Regulatory Requirements Would Best Serve the Interests of African Cocoa Farmers?”
Will Dutch Onion Companies Continue to Support West African Onion Sector Development or Push for the Elimination of Import Restrictions on EU Onions?
Summary
West Africa markets for Dutch onion exports have become increasingly important, with the Africa markets overall being seen as having the greatest future growth potential. With some African government using quantitative restriction on onion imports to try and boost domestic production in response to growing demand, the question arises: will the EC seek to use trade agreement commitments to put an end to the application of all forms of quantitative restrictions on imports from the EU? Pressure to do so could increase should a ‘hard Brexit’ occur, which disrupts Dutch onion exports to the UK market. The experience of the August 2014 Russian import embargo suggests any loss of markets for Dutch onion exporters leads to expanded efforts to increase exports to African markets, particularly in West Africa.
The Netherlands onion export trade has become more dependent on West African exp Read more “Will Dutch Onion Companies Continue to Support West African Onion Sector Development or Push for the Elimination of Import Restrictions on EU Onions?”
The Link Between EU Agri Food Sector Protectionism and the Value of ACP Trade Preferences Highlighted
Summary
The WTO has once again highlighted the EU’s extensive use of tariffs and non-tariff measures to manage EU agri-food markets. Preferred ACP exporters benefit from these protectionist EU trade policies, with any movement away from these policies potentially see mainly ACP/LDC exporters losing out to the tune of €1.6 billion. The prospects of such losses are very real with regard to the UK market, where there is strong pressure under the current MFN tariff review to abandon MFN tariffs where the UK has no or only limited production interests to protect. Looking forward, within the EU, a long standing insistence on abolishing quantitative restrictions on imports from the EU under economic partnership agreements concluded with ACP countries, is being given new impetus with the creation a Chief Trade Enforcement Office, dedicated to making sure existing trade agreement commitments by 3rd countries are fully implemented. Such a course of action however sits uneasily with the EU’s own extensive use of quantitative restrictions in sensitive agri-food sectors. Read more “The Link Between EU Agri Food Sector Protectionism and the Value of ACP Trade Preferences Highlighted”
Debate on West African Dairy Sector Trade Policies Likely to Intensify in Coming Years
Summary
Intra-regional dairy sector trade tensions are likely to intensify in West Africa in the coming years as the Government of Nigeria seeks to refine the use of its foreign exchange allocation system to support the development of local milk production, while Ghana and Cote d’Ivoire move ahead with tariff reductions on milk powders imports from the EU. The establishment of national platforms by EU dairy companies focused on regional markets, could see a growing formal and informal trade in reconstituted dairy products across West African borders, with a view to exploiting variations in the import tariffs levied on milk powders by different ECOWAS members. Read more “Debate on West African Dairy Sector Trade Policies Likely to Intensify in Coming Years”
EU Rice Consumption to Rise Slightly, But What Future Role ACP Suppliers?
Summary
Despite the strong growth in EU rice consumption and imports in recent years, ACP rice exporters have not benefited from this trend, with EU rice import growth being accounted for by imports from Myanmar and Cambodia, both of which are LDCs. With EU rice consumption and imports stabilizing, the only prospect for increased EU imports of rice from Guyana and Suriname would appear to lie with an extension of existing human rights related sanctions, which have seen certain EBA tariff preferences withdrawn from Cambodia. This would require such measures to be extended both in terms of product scope and geographical coverage to encompass both rice and Myanmar respectively. The EU currently has no plans to take any such action at the moment, with the response of the Government and Cambodia and Myanmar to ongoing enhanced dialogues on human rights being critical to the future evolution of the EU’s trade and human rights policy. Read more “EU Rice Consumption to Rise Slightly, But What Future Role ACP Suppliers?”
EU Organic Import Control Implementing Regulation Highlights Potential for Brexit Related Trade Administration Based Disruption of ACP Exports
Summary
Changes in the administration of the Certificate of Organic Inspection (COI) in the EU’s TRACES computerised trade facilitation system, aimed at strengthening traceability along organic supply chains have given rise to problems which could see some imports of organic products from ACP countries diverted back onto the general market, at substantial commercial cost to the ACP exporters concerned. The potential problem however has been swiftly identified and existing dialogue structures have been used to raise with the EC the specific concerns of ACP organic exporters. The EC has swiftly proposed modifications to the TRACES reporting scheme, with ACP exporters now being invited to clarify whether this solution addresses the administrative problem which had arisen. This issue in the organic sector highlights the vital importance of ensuring the smooth functioning of trade administration arrangements to ACP suppliers of short shelf life products. It raises serious concerns over the absence of any formal institutionalised mechanisms for ACP trade dialogue with the UK, should problems in trade administration documentation arise within the process of the UK’s departure from the EU customs union and single market. Read more “EU Organic Import Control Implementing Regulation Highlights Potential for Brexit Related Trade Administration Based Disruption of ACP Exports”
EU Poultry Sector Projections Suggest Continued Strong Growth in EU Poultry Exports to Africa
Summary
The export of chicken parts (particularly bone- in quarters and halves) is driven by expanding EU poultry meat production, given the EU consumer preference for breast meat. This is greatly assisted by a protective trade policy which carefully manages imports of poultry meat to allow EU producers to fully benefit from growing EU consumer demand, despite their production cost disadvantages compared to competitive 3rd country poultry meat exporters. This enables the maintenance of higher EU market prices which allows a cross subsidisation of exports of residual poultry parts. Against this background across a growing number of sub-Saharan African countries, the strong growth in EU poultry meat exports which stifles local poultry sector development in the face of growing African consumer demand is set to continue. Read more “EU Poultry Sector Projections Suggest Continued Strong Growth in EU Poultry Exports to Africa”