Summary
The shortage of UK veterinarians required to sign off on Export Health Certificates could seriously constrain UK exports of livestock products destined for the EU market. While Export Health Certification issues should impact on exports to all destinations, if the UK government adopts the BMPA proposals to use supervised Certification Support Officers instead of fully qualified veterinarians to sign off on Export Heath Certificates this could facilitate exports of UK livestock products. However, the EU is unlikely to accept such a downgrading of export health certification controls, without a thorough assessment of the phytosanitary and food safety implications. This could create a situation where in 2021 the new supervised Certification Support Officers were able to sign off on exports to non-EU destinations but not exports to the EU. This would lay the basis for an expansion of displaced UK livestock product exports to ACP markets rather than the EU markets currently served. In the poultry sector, this needs to be seen in a context where over half of all UK extra-EU poultry meat exports were destined for ACP market in 2019. Read more “Non-Tariff Issues Threaten to Undermine UK Meat Exports to EU27 Markets and Generate Displace of UK Exports to ACP Markets”
Disruptions Along EU UK Supply Routes Less Than Expected but Onward Haulage Costs Rising and Longer Time Required For Orders to Be Fulfilled
Summary
Road traffic disruptions along EU/UK ‘RoRo’ routes have been less than feared. This is largely due to a sharp drop in traffic flow along these routes. However, the changes to EU/UK border arrangements have seen an increase in road haulage costs along these routes. Some of these causes of cost increases are transitional and will decline by 2022. Other causes of cost increases are structural and could undermine the commercial viability of the use of triangular supply chains currently used to get ACP products to market. This will be a particular problem for lower value fresh produce and smaller scale ACP exporters. Individual supply chains will need to assess the long-term commercial implications of rising road haulage costs along EU-UK ‘RoRo’ routes. Policy initiatives to remove the rules of origin complications along triangular supply chains for ACP exporters whose products enjoy duty-free/quota-free access to both the UK and EU market are possible. Equally it should be possible on risk assessment ground to waive any need for phytosanitary import controls on ACP products which have recently been subject to such controls on entry to the EU when onward shipped to the UK. However, under current circumstances this will need to be negotiated bilaterally with the UK. Such initiatives would ease pressures on road haulage operators and incentivise the resumption of more normal haulage arrangements for ACP products shipped to the UK via the EU Read more “Disruptions Along EU UK Supply Routes Less Than Expected but Onward Haulage Costs Rising and Longer Time Required For Orders to Be Fulfilled”
Restoring Ghana’s Duty-Free Access to the UK Market is an Urgent Priority
Summary
The tariff bill faced by Ghanaian exporters as a result of the UK allowing pre-existing duty-free access to lapse without an ‘bridging mechanism’ in place is mounting. It is unclear how long it will be before more companies shift their sources of supply away from Ghana. Given agreement had been reached on all substantive issues of concern, the failure of the UK to include Ghana in the ‘bridging mechanism’ appears to be linked to a misunderstanding of the constitutional constraints arising from the democratic election process in Ghana. This limits the capacity of Ministers to sign international trade agreements, in the absence of due parliamentary endorsement. The adoption of a course of action by the UK government which economically penalised Ghana for respecting Parliamentary processes and constitutional requirements, would appear to be a matter deserving of urgent political attention at the highest level in the UK government. Read more “Restoring Ghana’s Duty-Free Access to the UK Market is an Urgent Priority”
What Does the New EU UK Trade Agreement Mean for ACP Sugar Exporters?
Summary
The new EU/UK trade agreement includes new rules of origin requirements, which in the absence of ‘diagonal cumulation’ arrangements, could pose problems for some ACP raw sugar sector supply chains, including those serving food and drink manufacturing industries. Given the absence of ‘diagonal cumulation’ provisions in the EU/UK trade agreement a significant restructuring of the affected supply chains will be needed, in a context where demand for ACP sugar is shrinking. This could result in all but the largest and most efficient ACP sugar exporters being driven off UK and even some E27 markets. There is potentially some scope for addressing the problems created by the absence of EU/UK ‘diagonal cumulation’ arrangements through the inclusion of specific provisions in enhanced ‘rolled over’ UK trade agreements and even existing EU agreements, should the EU come around to considering such arrangements. However, this will require a sustained lobbying effort on the part of the governments of the affected ACP countries and allies in other sectors facing similar ‘diagonal cumulation’ constraints on the functioning of triangular supply chains. Read more “What Does the New EU UK Trade Agreement Mean for ACP Sugar Exporters?”
The Case of Fresh Horticultural Products What Does the New EU UK Trade Agreement Mean for ACP Triangular Supply Chains?
Summary
Of the three major issues arising in the ACP horticulture sector trade in the context of the new EU/UK trade arrangement, the most important relate to rules of origin verification, given the absence of any ‘diagonal cumulation’ arrangements. This may require all ACP horticultural exports entering the UK market via the EU to remain under customs supervision (under Common Transit Convention procedures) if duty-free access to the UK market is not to be lost. Currently the infrastructure for the effective implementation of CTC procedures is not fully in place, with this potentially posing challenges for the onward trade in ACP horticultural products to the UK market. The phasing in of UK phytosanitary import controls poses tricky choices for ACP exporters in the first months of 2021. Efforts to simplify EU/UK procedures for the cross-border movement of goods could usefully take on board ACP concerns. ACP organic exporters will need to keep a close eye on how EU/UK mutual recognition of organic certification evolves in 2023, so timely and appropriate action can be taken to ensure exports can still be placed for sale as organic products in the target markets after 2023. Read more “The Case of Fresh Horticultural Products What Does the New EU UK Trade Agreement Mean for ACP Triangular Supply Chains?”
The Case of Cocoa What Does the New EU UK Trade Agreement Mean for ACP Triangular Supply Chains?
Summary
The simple change of tariff heading rules of origin requirements for simple value-added cocoa products (1803, 1804 and 1805) included in the EU/UK trade agreement means the existing ACP cocoa supply chains within which the processing of ACP cocoa beans takes place in the EU prior to onward shipment to the UK will face no disruption as a result of the new EU/UK trade arrangements. However, more complicated rules of origin are faced for cocoa products containing sugar which fall under tariff heading 1806. In addition, the absence of ‘diagonal cumulation’ provisions in the EU/UK trade agreement, means ACP value added cocoa products shipped to the UK via the EU will in future need to remain under customs supervision prior to landing in the UK; with extensive use being made of the Common Transit Convention (CTC) in the handling of such cargoes. However, currently there are serious infrastructure and human capacity constraints on the UK’s efficient operation of CTC procedures. This will complicate the immediate use of such arrangements. Scope for moving over to direct shipments to the UK would also appear to face some transitional challenges given current UK port congestion. More serious problems would appear to be faced in regard to onward trade from the EU to the UK in high sugar content value added cocoa product supply chains (e.g., chocolate bars) where these have traditionally used ACP sourced sugar. The absence of ‘diagonal cumulation’ provisions means manufacturers will need to shift over to the use of ‘wholly obtained’ EU or UK sugar, if eligibility for duty free access for high sugar content value added cocoa products is to be retained. Read more “The Case of Cocoa What Does the New EU UK Trade Agreement Mean for ACP Triangular Supply Chains?”
Growth in EU27 Poultry Meat Exports Projected on the Basis of Continued EU/UK Duty Free Trade
Summary
While the rate of growth in EU poultry meat exports is slowing down, the EC projects a continued expansion of EU exports up to 2030 on the back of a continued expansion of EU poultry production. While the December 2020 EU/UK trade deal will avert the imposition of standard MFN tariffs on EU/UK mutual trade in poultry products, the introduction of standard 3rd country import control requirements will generate some trade disruption. This will largely affect UK poultry meat exports to the EU27. The trade in value added food products containing poultry meat is also likely to be complicated by new rules of origin requirements for EU/UK trade, given no agreement has been reached on ‘diagonal cumulation’ arrangements. These issues are likely to lead to some level of trade displacement of mutual EU/UK trade in poultry products to 3rd country markets. This is most likely to result in increased UK exports of poultry parts to non-EU27 markets. Read more “Growth in EU27 Poultry Meat Exports Projected on the Basis of Continued EU/UK Duty Free Trade”
Key Challenges Identified in the NAO Brexit Preparedness Report: Implications for the ACP
Summary
The November 2020 NAO report paints a pessimistic picture of the prospects for the effective functioning of the UK/EU border controls in 2021. Developments since November 2020, in regard to the intensifying Covid-19 crisis will not have helped matters. ACP triangular supply chains, which require the movement of goods across an EU/UK border, are likely to be most severely affected. However, serious congestion at UK seaports, with both berthing and unloading delays, could mean direct ACP sea freighted exports could also face delays, with these compounding the system wide challenges UK border control authorities will face in 2021. Read more “Key Challenges Identified in the NAO Brexit Preparedness Report: Implications for the ACP”
Punishing Start to Ghana’s Post Brexit Trade Relations with the UK
Summary
Despite long-standing warnings over the complexities faced in rolling over EU trade agreements with West Africa and the need for transitional arrangement to avert a highly damaging hiatus in trade relations between Ghana and the UK, on 3rd January 2021 the UK government imposed standard MFN tariffs (£95/tonne) on Ghanaian bananas landed in the UK. This is effectively holding a gun to the head of the Ghanaian government to agree to specific provisions in the ‘rolled over’ agreement on the tariff phase down schedule. The Government of Ghana has long expressed concerns over the need to ensure consistency between it tariff commitments under the UK agreement and its regional ECOWAS trade protocol commitments. Given the political sensitivity of this issue in Ghana the ongoing UK/Ghana negotiations could run substantially beyond the matter of weeks alluded to in the Joint December 31st statement. This could seriously undermine Ghana’s long term banana export trade to the UK which has taken over a decade to build up and could ensure Ghana’s tuna canning plants which have been closed over Christmas, never reopen. The first step in the UK’s autonomous trade policy will then have been to undermine tens of thousands of jobs in a key Commonwealth ally in Africa, which represents a bastion of democratic stability in a troubled region. Read more “Punishing Start to Ghana’s Post Brexit Trade Relations with the UK”
Short Term Road Haulage Regulatory Fix Reassures Hauliers but Uncertainties Remain
Summary
The EU has proposed regulatory proposals for contingency measures in four main areas: fishing activities, aviation connectivity and safety, road transport connectivity, and rail connectivity. The two main areas of concern to ACP exporters relate to rail and road connectivity between the mainland EU and the UK. These regulatory measure for the road haulage sector while essential will not address the problems of road haulage delays and rising costs which are now emerging. However, these delays and cost increases will be much more severe from 1st January 2021 if these contingency measures are not in place. The issue of aviation connectivity, if not addressed could also carry consequences for international aviation services. This could compound the air freight challenges which have arisen as a result of the Covid-19 pandemic. Any breakdown in EU/UK fisheries relations meanwhile, could carry trade documentation and even tariff implications for the onward trade in ACP fisheries products from the EU to the UK. Read more “Short Term Road Haulage Regulatory Fix Reassures Hauliers but Uncertainties Remain”