Summary
The value of EU agri-food exports to Mauritius grew 53% between 2013 and 2017 while the value of EU agri-food imports from Mauritius fell 26%, with this largely attributable to the impact of EU sugar sector reforms. A ‘no deal’ Brexit however could present opportunities for Mauritian refined sugar exporters. In contrast the value of Malagasy agri-food exports to the EU grew 164%, while the value of imports from the EU grew 44%. This is attributable to the fragile political and economic stability attained since 2013. Zimbabwe’s agri-food sector trade flows have been impacted by the sustained political and economic crisis, with volatile export values and no change in the value of imports from the EU for the period as a whole. The value of agri-food exports from the Comoros has increased almost 60% since 2013, with strong growth in the unit value of earnings of both vanilla and essential oils. EU agri-food exports to the Comoros have grown faster than overall exports, at double the rate, with a strong increase in the value of EU poultry meat exports and an even larger increase in the volume. There has also been a strong increase in EU beef exports to Comoros. The Seychelles has no agro-food sector export trade with the EU, while the value of agri-food imports from the EU rose 61% between 2013 and 2017. Dairy products led the way in this trade expansion, with EU poultry meat exports also getting under way during this period. Brexit related issues arise for Zimbabwe in the resurgent cut flower trade given the dominant role the Dutch flower auction houses play in this trade and the potential for Brexit related disruption of triangular supply chains. Initiatives will be needed to ‘Brexit-proof’ these supply chains. For Seychelles and Madagascar Brexit related rules of origin issues in the fisheries sector will also need to be addressed under a ‘no-deal’ outcome to the current Brexit negotiations, with this potentially opening up investment and export trade opportunities in relations with the UK. Read more “Part 2 Country Specific Trends in EU Agri-food Sector Trade with ESA EPA Countries”
Category: Topics
Part 1 Overall Trends in EU Trade with ESA EPA Countries
Summary
The EU-ESA EPA is not a single agreement but a collection of five individual yet similar agreements covering a population of some 45.5 million. For 4 countries these agreement have been in place since 2012 while the 5th is scheduled to enter into force shortly. These agreements fall far short of the ambitious regional EPA, embracing up to 18 countries with a population of 541 million, which the EC initially sought. This has split the larger ESA region into 3 distinct groups in terms of trade relations with the EU, thereby complicating intra-regional trade integration efforts. Since the signing of the EPAs EU agri-food exports to ESA EPA signatories have grown strongly (+48%), despite there being no growth in direct EU exports to Zimbabwe. The growth in the value of EU agri-food imports from ESA4 countries was been slower at only +27%. This growth was attributable to the 164% growth in the value of imports from Madagascar which now dominates the ESA4 agri-food export trade to the EU. EU agricultural reforms and the multiplication of EU trade agreements with non-ACP countries are serving to reduce the value of traditional agri-food sector trade preferences, particularly for Mauritius and Zimbabwe. The Brexit process further complicates the situation, although a ‘no-deal’ Brexit could potentially open up new opportunities on the UK market for Mauritian refined sugar exports. Other important issues faced relate to the impact of the new EU plant health regulations on horticulture and floriculture exports and the impact of the expansion of EU agri-food exports on opportunities for the structural development of local agri-food sectors serving national and regional markets. ESA EPA signatories face differing challenges and opportunities as a result of current trends in EU agri-food exports to ESA EPA signatories and the wider Eastern and Southern African region. How EPA provisions are implemented in practice in the future, in the face of Brexit related commercial pressures, will have an important bearing on the future evolution of EU-ESA trade, as well as the scope for the development of intra-regional trade in the Eastern and Southern African region. Read more “Part 1 Overall Trends in EU Trade with ESA EPA Countries”
Cote d’Ivoire: EPA Implementation in the Context of EU’s West Africa EPA Strategy
Summary
In reviewing the EU-Cote d’Ivoire EPA the EC has placed considerable emphasis on the 80% expansion of Ivorian banana exports to the EU since the granting of full duty free-quota free access under the interim EPA in place of the former ACP Banana Protocol. This is seen as a major success story. However 2018 could prove to be the high point of Ivorian banana exports. Ecuador’s accession to the EU-Andean Pact FTA from 1st January 2017 has seen a 14.4% expansion of Ecuadorian banana exports to the EU in 2017 (+186,613 tonnes) and a 20% growth in the first 6 months of 2018. This has seen the first decline in Cote d’Ivoire’s share of the EU banana market in a decade. If a ‘no-deal’ Brexit occurs and EU bilaterally negotiated $ banana TRQs are not apportioned between the EU27 and UK markets, this will result in a significant increase in competition for Ivorian banana exports to EU27 markets, given the UK has accounted in recent years for 20% of EU banana imports. This down turn in the fortunes of Ivorian banana exporters will coincide with the start of the phased elimination of import duties on EU products, which is scheduled to start from 1st January 2019 and take place over a 14 year period. Read more “Cote d’Ivoire: EPA Implementation in the Context of EU’s West Africa EPA Strategy”
The Benefits PNG Has Derived from the Pacific-EU EPA
Summary
The EU-Pacific EPA is essentially two bilaterally concluded agreements with Papua New Guinea (PNG) and Fiji, which the EC hopes other Pacific ACP countries will accede to as they graduate out of LDC status. Agri-food products are of marginal importance in EU exports to PNG, but central to the EU’s imports form PNG, with the trade in palm oil playing a dominant role (around 58% of total imports by value). In recent years PNG has exported ‘differentiated’ palm oil in the form of ‘fully traceable sustainably certified palm oil ‘processed at a dedicated plant in the UK for distribution to sustainability sensitive food product manufacturers across the EU. It is unclear how a ‘no-deal’ Brexit would impact this trade. It is also unclear how Brexit could impact on the trade in canned tuna which has been a major growth area under the EU-PNG EPA. Read more “The Benefits PNG Has Derived from the Pacific-EU EPA”
Ghana: EPA Implementation in the Context of EU’s West Africa EPA Strategy
Ghana: EPA Implementation in the Context of EU’s West Africa EPA Strategy
Summary
Ghana, alongside Cote d’Ivoire, signed an interim EPA with the EU despite the stalled regional negotiations in order to preserve existing duty free-quota free (DFQF) access to the EU market. Since 2014 EU agri-food exports to Ghana have grown in value by 38.3%. This has seen strong growth in volume of EU poultry meat exports (+163%) and dairy exports (+44%), alongside a 93% increase in EU animal and vegetable fat exports and a 237.5% increase in exports of miscellaneous edible products. In contrast between 2014 and 2017 a small decline in the value of Ghanaian agri-food exports to the EU occurred. Despite this since 2008 the granting of full DFQF access for Ghanaian banana exports has seen a 57% increase in export volumes. However global volatile cocoa prices have held back any sustained growth in agri-food sector export values. Movement up the value chains to the export of more processed value added cocoa products is potentially offering greater agri-food sector export earnings stability and even growth in the future. However given the importance of the UK in Ghana’s export trade to the EU a key trade issue which is not being addressed is the impact of Brexit on the value of the Ghana-EU EPA preferences. A host or Brexit related issues need to be urgently addressed, including: securing continued DFQF access to the UK market after 29th March 2019; the scope for maximising opportunities for direct exports of value added cocoa products to the UK market arising from a ‘no-deal’ Brexit; minimising the trade diversion effects of Brexit on trade in animal products which could increase pressure on Ghanaian poultry, beef and dairy product markets; minimising the adverse effects of the EU’s new plant health regulation on emerging non-traditional horticulture and sub-tropical fruit exports. Read more “Ghana: EPA Implementation in the Context of EU’s West Africa EPA Strategy”
CARIFORUM EU EPA: Slow Pace of Implementation and Marginal Benefits
Summary
The EC’s analysis of the CARIFORUM-EU EPA while factually accurate is misleading. While the EU’s growing trade surplus with CARIFORUM is acknowledged the importance of the principal change brought about by the EPA – improved market access for EU exporters is glossed over. EU agro-food exports have shown particular strong growth with dairy products, meat and meat preparations, beverages and fresh vegetables leading the way. In contrasts the value of CARIFORUM agro-food exports has stagnated, although the masks a rise in agro-food exports to the EU from the Dominican republic and a decline in the value of CARICOM exports. The decline in CARICOM exports however mask a rise in non-traditional exports and a dramatic fall in the value of banana and sugar exports to the EU. Despite the institutional structures in place the single most important issue facing CARIFORUM exporters to the EU, Brexit, has not been addressed within EPA consultative structures. The impact of Brexit on the value of preferential exports under the EU EPA will be so profound as to require an immediate policy response from the EU to areas of CARIFORUM concern in regard to improving EPA implementation (e.g. removing all obstacles to full DFQF exports to the DOMs and OCTs, intensifying and acting on SPS dialogues, eliminating UTPs along CARIFORUM-EU supply chains, introducing flexibility in EPA implementation). The EU also needs to recognise and address the effects of its wider policy changes on the value of preferential access granted CARIFORUM countries under the EPA. Failure to do so will amount to a continued failure to deliver on the expectations raised by the EPA agreement in the Caribbean region. Read more “CARIFORUM EU EPA: Slow Pace of Implementation and Marginal Benefits”
The EU Central Africa EPA Where Cameroon Stands Alone
Summary
Cameroon is the only Central African country to have an EPA with the EU in place, with this having been under provisional application since July 2014. This unilateral decision to conclude an EPA was taken to ensure continued duty free-quota free access for Cameroonian banana exports to the EU. According to the EC the implementation of the EU-Cameroon agreement ‘has now reached cruising speed’. Brexit related EU/UK trade disruptions in the poultry sector could see the EC looking to enforce EPA provisions on the prohibition of the use of quantitative restrictions on imports from the EU. This could adversely impact the Cameroonian poultry sector. A ‘no-deal’ Brexit could also end Cameroon’s duty free-quota free access to the UK market unless UK specific trade arrangements are set in pace and could increase competition on EU27 markets unless the issue of the future level of TRQ restricted access to EU27 markets is favourably addressed. Brexit could also disrupt EU27/UK cocoa product supply chains in ways which could create opportunities for increased levels of direct exports of value added cocoa products to the UK market, although this will require a careful review of opportunities in this regard by Cameroonian cocoa processing companies. Read more “The EU Central Africa EPA Where Cameroon Stands Alone”
EPA Benefits for Fiji Becoming Marginal as Brexit Threatens Further Disruptions
Summary
In its analysis of the state of the EU-Fijian EPA implementation the EC skates over the evolution of relations since for large parts of this period political relations and EU development assistance programmes with Fiji were suspended following the military coup. In addition at the economic level, given the direction of EU sugar sector reforms, the value of traditional Fijian trade preferences have been progressively undermined over this period. Given the dominant role sugar plays in EU-Fijian trade this does not bode well for future trade relations. Ironically in the short term the prospect of a ‘no-deal’ Brexit could open up new opportunities for Fijian sugar exports to the UK if the UK imposed standard MFN duties on sugar imports from the EU27 and the Fijian government was able to find a way of rolling over its current duty free-quota free access to the UK market from the 30th March 2019. Read more “EPA Benefits for Fiji Becoming Marginal as Brexit Threatens Further Disruptions”
Impact of EU FTAs in the Agri-Food Sector
Summary
EU FTAs are of growing importance to the growth of EU agri-food sector exports, with the EU using a variety of policy tools to increasingly open up overseas markets to EU exports. However the EU’s use of trade policy tools to protect EU producers is in distinct contrast to the policy prescriptions the EU seeks to enshrine in its trade agreements with ACP countries when it comes to the use of traditional agri-food sector trade policy tools aimed at managing trade liberalisation processes in sensitive sectors. The structure of EU EPAs does little to address the fundamental structural imbalance in EU-ACP agri-food sector relations. Fundamental policy coherence issues need to be addressed across the broad ambit of EU-ACP agri-food sector relations if the structural imbalance is to be addressed. The challenges faced in this regard are only likely to be exacerbated by recent EU agricultural policy changes and the Brexit process. Read more “Impact of EU FTAs in the Agri-Food Sector”
Putting the Implementation of the SADC-EU EPA in Context Factoring in the Earlier EU-South Africa TDCA
Summary
The review of the implementation of the EU-SADC EPA in 2017 notes in passing the exceptionally high growth rate in EU agro-food exports to South Africa since the entry into force of the EU reciprocal preferential trade agreement in 2000. Since 2009 this has seen remarkably high rates of expansion in food categories where tariffs have been dismantled and the EU has been exempted from trade measures adopted to curb increases in imports which threaten to undermine domestic production. The experience since 2009 raises serious questions about the effectiveness of the anti-dumping and safeguard provisions included in EU trade agreements. The implementation of safeguard measures and even SPS measures against EU agro-food exports is a fiercely contested area under the EU-SADC EPA. Finally the linking of development assistance provisions to EPA implementation priorities is potentially a double edged sword, since it raises the question of whose priorities are being promoted. This needs to be seen in the context of the acute tensions between African structural economic development objectives and EU export interests in the agro-food sectors which are seen as increasingly central to the European agricultural model. Read more “Putting the Implementation of the SADC-EU EPA in Context Factoring in the Earlier EU-South Africa TDCA”