Debate on West African Dairy Sector Trade Policies Likely to Intensify in Coming Years

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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?

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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to lie with an extension of existing human rights related sanctions, which have seen certain EBA tariff preferences withdrawn from Cambodia.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?”

Will St Lucia Continue to Have an Export Trade Relationship with the UK once the UK Leaves the EU Customs and Single Market?

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Summary
With the UK’s current MFN tariff review posing the question: should the UK government remove all tariffs where the UK has ‘zero or limited production interest’,  the St Lucian banana sector could lose significant  margins of tariff preferences which could prove to be the final nail in the coffin of St Lucia’s banana exports to Europe. The UK is the only EU market served by St Lucian banana exports with bananas accounting for fully 83% of total exports to the UK. This could see only a marginal residual export trade relationship remaining from 2021. With the UK market taking more in exports from St. Lucia than all the other EU27 market combined, this would also profoundly undermine St Lucia’s export trade relationship with the EU. Given the basis the banana trade provides for ongoing efforts at agricultural export diversification, retaining in place existing UK MFN tariffs is essential to St Lucia’s continued trade relationship with the UK Read more “Will St Lucia Continue to Have an Export Trade Relationship with the UK once the UK Leaves the EU Customs and Single Market?”

No Real Respite for African Milk Producers Given Projected Trends in EU Dairy Production and Exports

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Summary
EU milk production will continue to expand in the coming decade adding 1 million tonnes per year up to 2030. The growth rate in global import demand for dairy products is however slowing down as self sufficiency rate sin some developing country regions improve.  The EU will however remain the leading global diary exporter. The main area of concern for ACP countries is EU milk powder exports. Where sustained high levels of skimmed milk powder (SMP) exports will be maintained, though be it below the 2019 peak. Exports of fat filled milk powder (FFMP)will also continue to increase, reinforcing an import-based model of African dairy sector development. This will be reinforced by EC efforts to secure the removal of both tariffs and all non-tariff barriers to EU exports of dairy products to growing African markets. A more detailed analysis of the impact of these EU exports on local integrated African dairy sector development is needed, with this requiring better reporting on trends in EU export of FFMPs. A key question remains: how can the EU’s current short-term export maximization focus in dairy sector relations with Africa be reconciled with the longer term need to promote the structural development of Africa milk production and the locally integrated development of African dairy sectors? Read more “No Real Respite for African Milk Producers Given Projected Trends in EU Dairy Production and Exports”

UK to Strike Out on Bold New Trade Policy but Will Africa and the Caribbean Take the Hit?

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Summary
The UK has formally announced the launch of an on-line public consultation on its future MFN tariff regime.  This consultation appears limited to UK stakeholders and largely ignores the UK’s trade and development commitments enshrined in a host of preferential trade arrangements the UK has sought to ‘roll over’. The value of these ‘rolled-over’ trade arrangements would be profoundly undermined by any move towards the kind of zero UK MFN tariff regime which the Secretary of State appears to be championing. Some €1.5 billion in African and Caribbean exports, mainly from Commonwealth countries would be adversely affected, with 8 countries seeing over 70% of their current direct exports to the UK adversely affected and a further 7 countries likely to see between 46% and 69% of their direct exports to the UK adversely affected. With no formal structure for dialogue with the UK government operative, there is a need for special initiatives from African and Caribbean governments to place their concerns around the current UK MFN tariff review on the table for consideration by the UK government. Read more “UK to Strike Out on Bold New Trade Policy but Will Africa and the Caribbean Take the Hit?”

Opening Salvoes Setting Out UK ‘Redlines’ in UK/EU Negotiations Pose Challenges for ACP Triangular Supply Chains

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Summary
The UK governments rejection of binding commitments on regulatory alignment with the EU and insistence on preparing for full border controls if a comprehensive FTA with the EU cannot be agreed and in place by 1st January 2021 is causing concern in business circles. The British Ports Authorities has described this new policy approach as likely to create a situation which looks ‘a bit like a no-deal’. This could seriously disrupt the functioning of ACP supply chains which serve UK markets for short shelf life horticulture and floriculture products via initial ports of landing in EU27 member states. Special arrangements for the handling of this onward trade are required if a range of ACP exporters of short shelf life horticulture and floriculture products are not to be driven out of the UK market.  These special arrangements need to be agreed in a matter of weeks if private sector operators are to make the necessary investments in ensuring the continued smooth flow of ACP goods to the UK market along these triangular supply chains from 1st January 2021. Read more “Opening Salvoes Setting Out UK ‘Redlines’ in UK/EU Negotiations Pose Challenges for ACP Triangular Supply Chains”

EU Sugar Sector Restructuring Seeing Stabilisation of EU Production Import and Export Trends Which Pose Challenges for Some ACP Sugar Exporters

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Summary
EU sugar production is stabilising but on a gradual upward trend to 2030, in the context of declining human consumption of sugar in the EU.  This will see reduced EU sugar imports and increased EU sugar exports with the EU being a growing net sugar exporter from 2024. EU corporate adjustment to the post quota market realities continues apace, with factor closures in efficient beet sugar production zones as processing operations are consolidated to maximise cost reductions. Maximisation of utilisation of installed capacity efforts place beet co-refiners in a more competitive position than traditional raw cane sugar refiners, with some ACP exporters still needing to rethink their marketing strategies in light of the evolving EU27 market realities. Some ACP sugar exporters however are constrained in their marketing options by existing patterns of corporate ownership. Responding effectively to evolving EU market realities and the UK’s future sugar sector MFN tariff policy will be critical to the commercial viability of existing patterns of ACP sugar exports to the EU27 and UK market respectively. Read more “EU Sugar Sector Restructuring Seeing Stabilisation of EU Production Import and Export Trends Which Pose Challenges for Some ACP Sugar Exporters”

EU Organic Import Control Implementing Regulation Highlights Potential for Brexit Related Trade Administration Based Disruption of ACP Exports

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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

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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”

The UKs Commitment to Regulatory Divergence Could Complicate Functioning of ACP Triangular Supply Chain Exports to the UK Market

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Summary
Recent statements by the UK government committing it to regulatory divergence from the EU once it has left the EU customs union is causing concerns in the UK food and drink sector that this will sound the death knell of frictionless trade with the EU. While it remains unclear to what extent the desire not to be governed by EU defined rules will translate it actual regulatory divergence, serious issues arise for ACP exporters of short shelf life agri-food products who serve the UK market along supply chains which pass through EU27 member states. This is leading to calls for the UK and EU authorities to:

  • waive any need for customs checks for good transiting EU27 member states where duty free-quota free access if enjoyed to both the UK and EU27 markets under parallel ‘rolled-over’ trade arrangements;
  • waive any need for UK phytosanitary checks on the basis of an EU commitment to the continued conduct of phytosanitary checks on imports destined for the UK market;
  • the communication of these commitments to concerned supply chain stakeholders and supporting the establishment of logistical and administrative arrangements to ensure the continued smooth flow of short shelf life products along triangular supply chains.

Read more “The UKs Commitment to Regulatory Divergence Could Complicate Functioning of ACP Triangular Supply Chain Exports to the UK Market”