EU Council Agrees Guidelines for EC Engagement in the Negotiation of Transitional Arrangements with the UK

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Summary

The EU Council guideline have called for the UK to remain bound by the obligations entered into under trade agreements concluded while a member of the EU throughout the transition period in EU27/UK trade relations. According to remarks by Chief Negotiator Barnier this obligation should be enshrined in the EU/UK Withdrawal Agreement concluded as part of the Article 50 negotiations. However Michel Barnier made it clear that the EU’s commitment in this regard cannot ensure ‘the UK keeps the benefits from these international agreements’, with this depending on the views of the EU’s international trade partners. Read more “EU Council Agrees Guidelines for EC Engagement in the Negotiation of Transitional Arrangements with the UK”

Global Sugar Market Trends Could Increase Pressure on ACP Exporters to the EU Market

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Summary
The EC has argued sugar imports under the CXL scheme will be discouraged in the coming period, given the much lower average EU market price premium. However world market sugar prices have got off to a bad start in 2018, losing 10.4% of their value by mid-January. These lower average world market sugar prices, by increasing the EU market price premium to around 22% above the EU’s CXL duty could encourage increased volumes of CXL sugar imports into the EU. This would then intensify competition for ACP sugar suppliers, in the context of a halving of EU import demand. This could potentially accelerate the process by which high cost ACP suppliers are squeezed out of the EU sugar market. Read more “Global Sugar Market Trends Could Increase Pressure on ACP Exporters to the EU Market”

Declining Prices of Dark Meat Intensify Competition for African Poultry Producers

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Summary
While on global market price of whole chickens and breast meat remain strong, ‘dark’ meat prices are falling. This is a source of concern to sub-Saharan African poultry producers. Leading EU poultry producers are increasingly targeting African market. In this context an over vigorous implementation of EPA commitments on the elimination of non-tariff barriers to import from the EU could see African markets increasingly opened up to rapidly expanding EU poultry meat exports.  This could carry serious consequences for African poultry meat producers, in a context where considerable rural income earning opportunities can be generated along poultry feed supply chains. Read more “Declining Prices of Dark Meat Intensify Competition for African Poultry Producers”

Health Based Sugar Taxes Gaining Ground Globally

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Summary
Health based sugar taxes are increasingly a global phenomenon, with sugar taxes now in use or pending in Europe, the Caribbean, Latin America, North America, Asia, Australasia, the Middle East, and Africa. The prospect of sugar taxes is also stimulating food and drink industry product reformulation initiatives, with varying levels of industry commitment. Some ACP sugar exporters are responding to shifting patterns of global demand growth and moving away from their traditional EU focus. All ACP sugar exporters will need a better understanding of the end use to which their sugar exports are put in order to assess their vulnerability to  trends in reduced use of ‘hidden sugars’ in the food and drinks industry. Read more “Health Based Sugar Taxes Gaining Ground Globally”

Implications of Improving Phytosanitary Control Systems for the Attainment of SDGs

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Summary

Investments in strengthening SPS control systems in ACP countries can only be effective in contributing to the SDG objectives of poverty eradication and ending hunger if complemented by additional initiatives. Firstly initiatives to end unfair trading practices (UTPs) along ACP-EU agro-food sector supply chains through the extension of scheduled EU regulatory initiatives to combat UTPs to ACP-EU supply chains. Secondly initiatives to improve the design and implementation of EU SPS control requirements in ways which take into account the mode of production used by smallholder producers, while ensuring the integrity of arrangement for attaining underlying SPS policy objectives. Read more “Implications of Improving Phytosanitary Control Systems for the Attainment of SDGs”

Growing Role of Ukraine in EU Poultry Meat Imports Raises Rules of Origin and SPS issues in EU Poultry Meat Export Trade

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Summary
The processing in EU member states of poultry birds raised and slaughtered in the Ukraine raises both important rules of origin issues in the EU poultry meat export trade with ACP countries (particularly South Africa) and important SPS control concerns (given the initial origin of the birds is being disguised through the cutting and packaging operations carried out in EU member states). This expanding trade suggests a need for stricter proof of origin documentation requirements on poultry meat imports from the EU both on SPS and rules of origin grounds. The rules of origin dimension is particularly important where reciprocal preferential trade agreements covering poultry meat are under implementation (e.g. under the SADC-EU EPA). Read more “Growing Role of Ukraine in EU Poultry Meat Imports Raises Rules of Origin and SPS issues in EU Poultry Meat Export Trade”

Latest EC Projections Show Growing Export Orientation of EU Poultry Sector

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Summary

The EU poultry sector trade is composed of low value exports and high value imports, with the EU being a net exporter in volume terms but a net importer in value terms. In recent years the export of frozen poultry parts has risen dramatically, with the importance of sub-Saharan African markets to EU exporters growing significantly. In the coming years continued growth in EU production, in the context of a slowing down of consumption growth, will see the importance of export markets to the EU poultry sector grow significantly. This will see greater importance being attached to maximising revenue flows from the export of residual poultry parts. In the context of EPA implementation this could see increased pressure on African governments to remove all forms of trade barriers to EU poultry meat exports. This could then carry serious consequences not only for domestic ACP poultry producers but grain producers who supply feed to the poultry industry. Read more “Latest EC Projections Show Growing Export Orientation of EU Poultry Sector”

Timelines and Pitfalls in the Brexit Process

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Summary
The timeline for the negotiation of both the EU27/UK transitional trade arrangement and the long term framework for future EU27/UK relations are now clearer. What remains unclear is the legal basis for the transitional arrangement under EU and UK law as well as under WTO rules. This could lead to delays and a hiatus in trade relations.

Similar uncertainties arise in relation to transitional UK ‘roll-over’ trade arrangements with groupings of ACP countries engaged in EPA processes with the EU. This is not solely a UK issue but will require the agreement of the EU given the UK will continue to be subject to EU rules and regulations during the transition period. In addition there is the question of the WTO compatibility or acceptability of any transitional UK trade arrangements with groupings of ACP countries. Considerable technical and political challenges will need to be addressed in the coming months if the UK governments’ commitment to ACP countries in regard to ensuring continuity of market access is to be realised in practice. Read more “Timelines and Pitfalls in the Brexit Process”

Dramatic Changes Ahead in the EU Sugar Market

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Summary
The EU sugar sector is entering a new period in its development with the abolition of sugar production quotas: boosting production at the same time as domestic consumption is contracting; lowering average prices; and doubling exports at the same time as imports are halved. This will impact not only on domestic EU markets but also international markets, given the growing global orientation of EU sugar companies and the increased price competitiveness of EU sugar production. This will transform the market context facing ACP sugar exporters as well as the competitive position of ACP producers on regional markets. This will make the continued use of non-tariff trade policy measures a critical policy issue.  This adverse market situation will be compounded by the market effects of Brexit, a policy development not yet factored into EC projections given the uncertainty surrounding the final EU27/UK post Brexit trade arrangements. Read more “Dramatic Changes Ahead in the EU Sugar Market”

South Africa and Ghanaian Poultry Industries to Join Forces Against EU Dumping of Poultry Parts

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Summary
Poultry producers and trade unions in South Africa and Ghana have joined the FairPlay anti-dumping movement in opposing dumping of EU poultry parts on African markets. In West Africa, the EU poultry trade is seen as fuelling migration pressures. Given the scale of EU exports to 38 sub-Saharan African countries, this is a pan-African issue. Pressures on EU exporters to find new markets beyond the EU’s borders will increase in the coming years driven by expanding EU production, accelerating export growth and possible Brexit related trade disruptions. The experience under the EU-South Africa trade agreement suggests action by African governments will need to reach beyond tariff measures, although the use of non-tariff measures will increasingly be constrained by the obligations entered into by African governments under the EPAs concluded with the EU.

More broadly EU trade practices (e.g. the import of live chickens from Ukraine for slaughtering in the EU) suggests a need for stricter traceability requirements and the enforcement of rules or origin requirements under trade agreements with the EU. Read more “South Africa and Ghanaian Poultry Industries to Join Forces Against EU Dumping of Poultry Parts”