Treatment of Agriculture under a EU27/UK FTA

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Summary
Even with a comprehensive EU27/UK free trade area agreement in place it is almost inevitable that costs along EU27/UK agro-food sector supply chains will increase. It is far from clear whether the customs partnership option, maximum facilitation options or some amalgam of the two, will offer any solutions to the driving factors behind the cost increasing consequences of Brexit in the agro-food sector within the time frame envisaged for the transition period. Negotiating EU27/UK free trade arrangements in the agro-food sector is likely to prove difficult, despite the EU27’s interest in ensuring the continued free flow of agro-food exports to the UK market.

It is within this context that ACP governments will need to explore how current options under discussion can best be deployed to address the potential disruptions which could arise along triangular supply chains utilized by ACP exporters serving UK markets via EU27 member states or EU27 markets via the UK (i.e.UK-Ireland trade). Read more “Treatment of Agriculture under a EU27/UK FTA”

Will New Flexibilities in  EU Voluntary Coupled Support Payments  Provoke a WTO  Challenge?

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Summary
The timing of the EU’s decision to relax the requirements for the deployment of voluntary coupled support (VCS), which de facto removes the link between such payments and maintaining existing production in disadvantaged areas, could well fuel calls for a formal WTO challenge to VCS payments in the sugar sector under Articles 5 to 7 of the WTO Agreement on Subsidies and Countervailing Measures (SCM). The EC and some member states had opposed the amendment of the scheme ‘citing in particular WTO implications’, while an analysis from the European Parliament suggested the ‘market distorting effects …of the introduction of coupled support in the CAP 2014-2020’ should be addressed.  The findings of modelling undertaken by Wageningen University Research on the impact of VCS payments in the sugar sector would appear to strengthen the basis for an effective challenge to EU VCS payments under the SCM provisions of the WTO agreement. Read more “Will New Flexibilities in  EU Voluntary Coupled Support Payments  Provoke a WTO  Challenge?”

Problems of Re-consolidating UK Access under EU 3rd Country FTA Could Threaten UK Agriculture

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Summary
A cross party group of UK MEPs representing agricultural constituencies have requested a detailed explanation from the UK International Trade Secretary Liam Fox on how the UK government will secure continued preferential access to 3rd country markets covered by EU trade agreements, once the UK is no longer part of the EU (from 30th  March 2019). The current text of the EU27/UK Withdrawal Agreement is ambiguous on this issue, with serious WTO complications arising for 3rd country signatories of EU FTAs if they were to simply ‘roll-over’ UK preferential access once the UK was no longer part of the EU. Read more “Problems of Re-consolidating UK Access under EU 3rd Country FTA Could Threaten UK Agriculture”

British Sugar Commissioned Study Favours Maintenance of Existing Sugar Trade Policies Post-Brexit

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Summary
The debate on future UK sugar sector trade policy is intensifying. A British Sugar commissioned study recommends future UK sugar trade policy should: recognise the distortions in global sugar markets; ensure future UK policies address these distortions; avoid any unilateral cuts in sugar tariffs and replicate existing EU trade arrangements. The reports treatment of the subsidisation issue ignores the current effects of EU policies on EU27-UK trade in sugar and the knock-on effects this has on ACP/LDC suppliers, which are now being squeezed out of the UK market. The report also underestimates the difficulties of securing acceptance of the proposed apportionment of existing bilaterally agreed EU28 sugar TRQs between EU27 and UK markets post Brexit. Read more “British Sugar Commissioned Study Favours Maintenance of Existing Sugar Trade Policies Post-Brexit”

EU Moves to Restrict Poultry Imports from Brazil on SPS Grounds in Context of Challenges to Meat Sector Concessions in EU-Mercosur Negotiations

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Summary
The EC has de-listed 20 Brazilian meat and poultry processing plants, effectively halting imports into the EU from the affected meat company facilities. The Brazilian government has described the EC’s action as constituting ‘a trade war’ and see’s the EC’s action as a response to EU producer pressure to restrict the tariff rate quota for import of beef in the context of the EU-Mercosur negotiations. The Brazilian government is planning to appeal against the EC’s action in the WTO. The current developments in the Brazilian-EU meat sector trade highlight the importance of food safety and SPS issues in exporting to the EU. Given the challenges facing ACP exporters in consistently complying with evolving EU SPS and food safety standards it would appear enhanced structure for dialogue around these issues are required to ensure that in protecting plant, animal and human health in the EU, food safety and SPS controls are applied in a minimally trade disruptive manner. Read more “EU Moves to Restrict Poultry Imports from Brazil on SPS Grounds in Context of Challenges to Meat Sector Concessions in EU-Mercosur Negotiations”

EU Sugar Quota Abolition Begins to Eat at ACP/LDC Export Volumes and Earnings

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Summary
The reduction of EU sugar imports forecast to occur following the abolition of EU sugar production quotas is well underway, with exports to the sugar deficit UK market from traditional ACP sugar suppliers coming under particular pressure. Given the proposed 21 month transition period in EU27/UK trade relations this is likely to continue until at least 1st January 2021 and may extend beyond, depending on the nature of the long term post-Brexit EU27/UK trade arrangement set in place.

EU sugar exports are also growing faster than projected, with this reportedly contributing to the decline in world market sugar prices which has been underway. In the longer term growing EU export volumes could threaten production in less competitive sugar producing countries including in Africa (particularly West Africa and high cost Eastern African sugar producing countries). Against this background sugar sector trade policy could become a contested area in EU-Africa relations. Read more “EU Sugar Quota Abolition Begins to Eat at ACP/LDC Export Volumes and Earnings”

Parliament Committee Warns of Disastrous Consequences for the UK food and Drink Industry of a ‘No Deal’ Brexit

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Summary
The BEIS Committee has come out heavily in favour of maintaining as ‘frictionless’ access to the EU27 market as possible in order to protect the interests of UK processed food and drink exporters. The BEIS Committee further noted the lowering of tariffs on imports could be extremely damaging for UK farming, while bringing only marginal consumer price benefits. The importance of replicating all existing and pending EU trade deals to the UK processed food and drink sector was highlighted if growth in exports to non-EU markets is to be promoted. Amongst ACP countries particularly importance was attached to replicating the EU trade agreement with South Africa. In terms of resolving any potential conflict between maintaining access to EU27 markets and concluding new trade agreements the Committee implicitly came down in favour of concluding a comprehensive FTA with the EU27. While future close alignment of UK and EU27 agro-food sector tariffs could avert the threat of preference erosion on UK markets for products like bananas, rice, citrus fruit and other Mediterranean products, it would not assist in addressing the deteriorating position of the less efficient ACP sugar exporters on the UK market, which is linked to growing EU27 sugar exports to the sugar deficit UK market. Read more “Parliament Committee Warns of Disastrous Consequences for the UK food and Drink Industry of a ‘No Deal’ Brexit”

French Exporters Lead The Charge for African Sugar Markets

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French Exporters Lead The Charge for African Sugar Markets

Summary
The dominant role which French companies play in the expanding EU export trade in sugar to ACP countries is potentially a matter of major concern to efforts to develop intra-African trade in sugar. French companies are highly exposed to sugar exports to the UK, with any loss of the UK market arising from a ‘hard’ Brexit, requiring a 77% increase in French extra-EU sugar exports, if domestic EU27 markets are not to be disrupted by a ‘hard’ Brexit.  Such a sudden expansion of EU27 sugar exports to African markets could severely disrupt sugar markets in Africa and the efforts of competitive sub-Saharan Africa sugar producers to expand intra-African trade in sugars. It could also see an intensification of EC pressure on EPA signatories to live up to their trade agreement commitments in regard to the prohibition of the use of quantitative restrictions on imports from the EU. Read more “French Exporters Lead The Charge for African Sugar Markets”

New French legislation on strengthening position of farmers in agricultural supply chains tabled

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Summary
The French government is moving ahead with a legislative initiatives designed to give farmers first say in the basis of price formation for their products, based on agreed indicators of production and marketing costs. Meanwhile private initiatives are underway to try and take the sting out of the political pressures for a more equitable distribution of value along the supply chain. Regulatory initiatives in France however are restricted to French producers and are being designed in the context of a broader agricultural sovereignty strategy. It is therefore unclear how this national French initiative will be reconciled with an EU approach which sees prohibitions on unfair trading practices being applied equally to EU and non-EU supplier. Read more “New French legislation on strengthening position of farmers in agricultural supply chains tabled”

UK Government Fails to Extend Scope of Groceries Code

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Summary
Despite evidence of some serious unfair trading practices along African-UK horticultural supply chains presented during the CGA review process the British government has declined to take any action in this area. While this is consistent with the governments’ decision not to broaden the scope of the Groceries Code and the activities of the Groceries Code Adjudicator, it sits uneasily with EU proposals to include third country supply chains in its proposed regulatory initiative on the elimination of unfair trading practices along agricultural supply chains. The raises the question as to how the UK governments plans to deal with the transposition of these new regulatory requirements into UK law during the period up to the 1st of January 2021. Read more “UK Government Fails to Extend Scope of Groceries Code”