Category: Topics

Cut Flowers Sector Concerns Over Proposed UK Border Controls Highlighted

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Summary
The adverse effects of shortcoming in the UK’s approach to establishing border controls on goods entering from the territory of the EU on the cut flower trade has been highlighted. Information essential to the future conduct of this trade is still not available. Shortcomings in the design of administrative requirements and a general lack of business preparedness have also been highlighted. What is more, multiple freight issues arising from the creation of the new UK/EU border are also likely to severely impact the cut flower sector, with these posing particular problems for the triangular supply chains ACP exporters’ work through. Solutions to facilitate the continued smooth functioning of cut flower triangular supply chains are urgently needed. The outlines of such solutions are now emerging. They need to be actively pushed for by the concerned ACP governments and exporters, in association with Dutch cut flower industry in a context where there is limited ‘band-width’ in the UK and EC for dealing with triangular supply chain issues. Read more “Cut Flowers Sector Concerns Over Proposed UK Border Controls Highlighted”

UK Launches Consultation on its 260,000 Tonne Autonomous Tariff Quota for Raw Cane Sugar Imports

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Summary
The UK government has launched a public consultation on its new 260,000 tonnes duty free sugar ATQ. A critical issue will be how the UK manages the ATQ. Given the profound uncertainties around the future supply situation on the UK sugar market arising from the unresolved EU/UK trade negotiations a strong case exists for the adoption of a carefully managed application of the sugar ATQ, with its deployment being regulated to prevent both the emergence of supply surpluses or supply deficits on the UK market in the course of 2021. Such an approach would be beneficial to both ACP/LDC sugar exporters and domestic UK sugar beet producers and processors and could also support the attainment of public health policy objectives, if it was used to foster a gradual increase in UK sugar prices. Two complicating factors however exist, namely: the depth of the impending Covid-19 recession in the UK and the serious commercial challenges facing Tate & Lyles Sugar, which desperately needs to expand the capacity utilisation of its Thames refinery in the context of more remunerative market prices for sugar. The question arises as to whether the experience and capacity exists in the hard pressed UK government administration for the nuanced and sophisticated management of the new sugar ATQ. Read more “UK Launches Consultation on its 260,000 Tonne Autonomous Tariff Quota for Raw Cane Sugar Imports”

Tariff Treatment and Logistical Cost Uncertainties Generated by Stalled EU/UK Trade Negotiations Raises Problems in ACP Supply Contract Negotiations for Exports to the UK Market in 2021

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Summary
ACP supply contract negotiations for the delivery of products to the UK market along triangular supply chains are being complicated by the absence of an agreed framework for future EU/UK trade relations and the associated uncertainty around the level of new administrative and logistical costs the new border arrangements will generate. ACP exporters need to try to accommodate estimates of these increased costs into their tender offers for supply contracts currently under negotiation with UK supermarkets. If not, costly surprises could arise if supermarkets insist on current Delivered Duty Paid contract stipulations; which commonly involve all costs linked to the import process being carried by the foreign supplier. For direct ACP exports to the UK market, the prospect of a no-deal UK exit leading to a further revision of the UK’s MFN tariff regime, alongside uncertainty around the basis for the implementation of the UK’s new 260,000 tonne duty free quota for raw sugar imports, is overhanging contract negotiations for products such as bananas and sugar. Read more “Tariff Treatment and Logistical Cost Uncertainties Generated by Stalled EU/UK Trade Negotiations Raises Problems in ACP Supply Contract Negotiations for Exports to the UK Market in 2021”

Structural Price Pressures on UK Banana Market See Winfresh-UK Placed into Administration

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Summary
It is unclear what the implications will be for St Lucian banana exports of Winfresh-UK being placed in administration. While efforts are underway to draw Fyffes into a greater role in the marketing of St. Lucian bananas in the UK, it is unclear whether the inclusion of St. Lucian bananas would add value to Fyffes product portfolio, given the uncertainties surrounding the future of the UK banana market. While in May 2020 the UK proposed to retain in place existing MFN tariffs on banana imports beyond 1st January 2021, the UK food price inflation effects of a no-deal UK departure from the EU customs union could see a further revision of the UK MFN tariff schedule, with a move over to the ‘zero production- zero MFN tariff’ approach long advocated by the global trade liberalisation wing of the Conservative Party. St. Lucian and other ACP Bananas exporters would be highly vulnerable to such a policy shift, with this uncertainty making it extremely difficult to plot a way forward for St. Lucian banana exports as supply contract negotiations for 2021 get underway. Read more “Structural Price Pressures on UK Banana Market See Winfresh-UK Placed into Administration”

New UK Trade Advisory Groups Launched

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Summary
The functioning of the new UK business focussed trade advisory groups is greatly complicated by the absence of a coherent and integrated UK trade policy, rooted in broader UK policy objectives. The failure to get to grips with  the intricate interconnections between duty free/quota free access and non-tariff trade issues can be seen in both the UK/EU negotiations and the shortcoming of the UK’s ‘rolled over’ Continuity Agreements concluded with ACP countries. If these shortcomings are note effectively addressed, then this will undermine a range of existing ACP supply chains which serve UK markets. The absence of a clearly elaborated UK policy framework also means there is a risk that the potential to bring UK business bodies into the process of elaborating a coherent and integrated UK trade policy will degenerate into a lobbying platform for specific corporate interests and the adoption of a ‘shopping list ‘ approach to trade negotiations. Read more “New UK Trade Advisory Groups Launched”

How Helpful is the ECs Orientation in EU Trade Policy Review Consultation in addressing Post Covid-19 Recovery Challenge in ACP Countries?

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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?”

Continued Lack of Progress Sees Mounting Levels of Frustration on the EU Side and Increased Prospects of a No-Deal UK Departure from the EU Customs Union and Single Market

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Summary
EC negotiators are showing growing frustration at the lack of progress in EU/UK trade negotiations. The EU is looking for the UK to move beyond initial ‘red lines’, while the UK is looking for recognition of its sovereign right to determine its trade regulatory framework. Analysts suggest current positions risk lead to a ‘no-deal’ outcome by default. The urgency of ACP exporters assessing the real world implications of the UK’s departure from the EU customs union, with or without a deal, cannot be overstated. Similarly, the urgent need for ACP governments to launch a political initiative to ensure the implications for ACP exporters of the pending changes are acknowledged and addressed cannot be over stated. Read more “Continued Lack of Progress Sees Mounting Levels of Frustration on the EU Side and Increased Prospects of a No-Deal UK Departure from the EU Customs Union and Single Market”

Implications for ACP Exporters of Further Reductions of Import Tariffs on Ecuadorian Bananas

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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

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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”

Dominican Republic and Bananas Dominate ACP Organic Products Exports to the EU28

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Summary
ACP countries account for a growing share of EU organic imports, with the Dominican Republic and bananas playing a particularly important role in this trade. In 2019 the entry into force of new EU organic regulations and the UK’s departure from the EU customs union and single market could prove disruptive, unless sensitivity is shown to the potential trade disruptions changes to trade documentation requirements can cause. In the Brexit context an extended transitional period during which the EU and UK will continue to recognize certifications issued by organic certification bodies in each other territories would appear essential. Alternatively, ACP exporters will need to seek dual certification from EU27 and UK registered bodies, with this involving additional costs and considerable uncertainty given Covid-19 related movement and social distancing restrictions. Read more “Dominican Republic and Bananas Dominate ACP Organic Products Exports to the EU28”