Summary
The EC decision to recognise UK issued organic certification for the whole of 2021, averts the immediate danger of any loss of the commercial benefits of organic sales by ACP exporters on EU27 markets where these sales currently take place on the basis of UK issued organic certification. However, in the absence of an EU/UK mutual recognition on organic certification before the end of 2021, ACP exporters will need to secure both EU and UK organic certification with the additional costs this will entail, if the long term commercial benefits of organic sales are to be secured beyond 2021. The scope for these kinds of parallel ‘unilateral’ EU and UK actions and policy initiatives needs to be fully exploited if the commercial disruptions to ACP triangular supply chains are to be minimised.
In the absence of comprehensive EU/UT trade agreement or specific mutual recognition arrangements for organic products, from 1st January 2021 recognition of UK issued organic certification for the placing of goods on EU27 markets would have lapsed. This would have meant ACP exporters needed to secure EU issued organic certification before the end of 2020 if they were to continue to place their goods for sale on EU organic markets. However, this process has been complicated by Covid-19 linked travel restrictions and social distancing requirements.
The EC announcement on 4th December 2020, that it would recognise UK issued organic certification throughout 2021, ensures any ACP exporter whose produce are certified by a UK organic certification agency will continue to be able to place their products for sale on the EU market as organic products throughout 2021 (1).
The EC’s announcement is consistent with the EC’s decision to defer the entry into force of its new organic regulation until January 1st 2022 (from January 1st 2021), in light of the Covid-19 linked challenges faced in adopting the necessary secondary regulations.
The EC’s announcement mirrors an earlier unilateral UK announcement to continue to recognise EU issued organic certification throughout 2021 (see epamonitoring.net, ‘UK Decision to Roll-Over Recognition of EU Issued Organic Certification for Whole of 2021 Welcome News for ACP Organic Exporters, But IT Constraints Will Be Faced’, 5 November 2020).
This issue will however re-surface at the end of 2021, unless EU/UK mutual recognition arrangements for organic products are set in place in the course of 2021. The UK government continues to seek the inclusion of mutual recognition of organic certification as a technical annex to any FTA to be concluded with the EU.
Such mutual recognition would avoid any need for dual certification, thereby side stepping the additional cost this would otherwise give rise to. Mutual recognition would also avert any ‘changes to labelling or inspection requirements’, which would otherwise similarly add to the costs of serving organic markets in two separate regulatory jurisdictions. This, it is held, would bring ‘significant benefit to operators’ in the organic sector. (1).
| Comment and Analysis
It should be noted any loss of recognition in the EU of organic certification issued in the UK would not have halted exports. Trade would have continued as normal except the exported ‘organic’ product would not have been recognised as such in the EU and would have had to have bene sold on the general non-organic product market. This would have resulted in a loss of the organic price premium currently enjoyed. The risk of such commercial losses in 2021 has now been averted. However, in the absence of an EU/UK mutual recognition agreement on organic certification this will provide only short-term relief, with ACP exporters still needing to seek EU27 and UK specific organic certification for serving the EU27 and UK markets respectively after 1st of January 2022, if the continued commercial benefits of serving organic markets are to be secured in the long term. The need to secure such dual certification would however lead to a duplication of costs. This can only be avoided if an EU/UK mutual recognition agreement is eventually concluded. This potentially throws up a dilemma for ACP organic exporters: · should they seek both EU and UK organic certification once the end of the Covid-19 · should they wait until the end of 2021 to see if an EU/UK mutual recognition A decision in this regard is likely to hinge around the overall value of trade across which the additional cost of dual certification can be spread, with smaller scale ACP exporters likely to find themselves in a more difficult position than larger scale ACP exporters. The adoption by the UK and EU of parallel unilateral action which eases commercial pressures on ACP exporters as a result of the unintended consequences of the Brexit process, potentially offers a precedent for similar such ‘unilateral’ UK and EU initiatives to address other areas of concern to ACP exporters arising within the Brexit process. The scope for such parallel ‘unilateral’ EU and UK actions and policy initiatives is most prominent along ACP-EU triangular supply chains. With only weeks to go before the UK finally leaves the EU customs union and single market the scope for parallel ‘unilateral’ EU and UK actions and policy initiatives needs to be fully exploited if the commercial disruptions to ACP triangular supply chains are to be minimised. |
Sources:
(1) foodnavigator.com, ‘EU to recognise UK organic certification until 2021: A ‘huge relief’ that offers ‘short-term certainty’ 4 December 2020
https://www.foodnavigator.com/Article/2020/12/04/EU-to-recognise-UK-organic-certification-until-2021-A-huge-relief-that-offers-short-term-certainty#