Summary
A large well established tourism sector can provide significant opportunities for the export of high value low volume horticulture products to the EU. This is particular where tourist flights service horticulture product distribution hubs. A ‘hard’ Brexit however could bring into question the use of these hubs in serving the UK market. A Freshfel report has outlined the disruption ‘hard’ Brexit could give rise to. Some of these adverse impacts could be ameliorated by administrative cooperation between ACP, EU27 and UK authorities. The ACP Secretariat could usefully launch initiatives in these areas.
The strength of the tourism sector in the Dominican Republic has created considerable export opportunities on the EU market for local ‘long bean’ producers (Vigna unguiculata subsp. sesquipedlis). Tourism both exposes European consumers to local products (2) and provides a fast and direct means of delivering to market high value perishable products (1).
It is not just ‘long bean’ producers who benefit, but also producers of ‘mangos, Asian vegetables, aromatic herbs, pineapples, and avocados’, all of which can ‘hop on direct flights to Europe and arrive in a much fresher condition with longer shelf life’ (2).
In the winter tourism season the tourist sector provides ‘a large number of direct flights’ to European destinations, including weekly flights to the Netherlands, a distribution hub for horticulture products across Europe (1).
This represents a major logistical advantage for Dominican exporters, with a number of local producers simply being unable to keep up with the demand which the availability of cargo space generates for high value fresh produce (1).
To build on this tourism based link the ‘Exporta Calidad Program is working with Dominican exporters to develop a country source of origin branding for their produce’ (2).
The use of tourist flights to export horticulture products via distribution hubs which then serve markets across the EU including the UK, could be greatly complicated by a ‘hard’ Brexit. In August 2017 a report from Freshfel (European Fresh Produce Association) entitled ‘Impact of Brexit on the European Fruit and Vegetable Industry’, highlighted the sensitivity of perishable fruit and vegetable products to port disruptions linked to a ‘hard’ Brexit. Concerns were expressed about ‘the consequences of newly introduced official control procedures and customs clearance’ and the ‘lack of capacity and preparedness’ and ‘logistical constraints’ in the port of Dover. It was felt these factors could result in delays which shortened the shelf life of the products as finally delivered to retailers (3).
Specifically in regard to the transit trade the Freshfel report noted how ‘new transhipment rules including storage, warehouse facilities and other operations will need to be defined as soon as the UK becomes a third country trading partner’. It was felt ‘certification requirements would increase drastically’, with this requiring a transformation of current onward forwarding arrangements (3).
Currently forwarded cargoes may consist of mixed consignments, as one buyer orders different commodities from the same supplier. Currently once these products have entered the EU there is a free movement of goods with no need for further checks. However once the UK is outside of the EU each of these products will require its own phytosanitary certificate and certificate of origin, with all this documentation needing to be checked and verified. This is likely to be time consuming and costly (3).
Just one dimension of the cost implications will serves to illustrate the point. Freshfel notes how currently the issuing of a phytosanitary certificate usually costs €50 and hence in a container of 20 different fresh produce this would cost an additional €1,000 compared to the current situation (3).
To further illustrate the point the Freshfel report highlights the significant delays which occur on EU-Norway trade in fresh products as a result of the multiplication of certification documents, with this being seen as indicative of what could occur along EU27-UK supply chains post-Brexit. (3).
| Comment and Analysis While these logistical considerations provide good opportunities for Dominican exporters, not all Caribbean islands are similarly placed. Less frequent flight connections mean economies of scale on marketing cannot be attained, making it difficult to build up distinct differentiated supply chains.Other ACP regions such as east Africa are gaining similar advantages, while the expansion of scheduled services on the back of expanding business opportunities in regions such as West Africa is also opening up new export possibilities for high value, low volume perishable products (see companion article, ‘New scheduled air services open up opportunities for expanded Ghanaian fresh fruit exports to EU’ 17 April 2017). This commonly consists of high value low volume products; with onward forwarding often take place as part of ‘mixed consignments’ traded within the EU.Against this background a ‘hard’ Brexit could pose particular problems for the functioning of these triangular supply chains. This suggests there may be a need to rethink how these triangular supply chains function. However, this is likely to be by no means a straight forward exercise. Many ACP countries which export relatively low volumes may have few if any commercially viable alternative shipment routes.This makes getting to grips with the administrative and regulatory complications which a ‘hard’ Brexit could throw up for the functioning of triangular ACP supply chains a matter of some considerable importance. Indeed it would appear to require a firm political commitment from the UK and EU authorities to taking all necessary steps to ensure disruption of ACP exports along triangular supply chains are minimised (ACP/EU27/UK or ACP/UK/EU27). This applies both under any transitional period and once the UK formally leaves the EU customs union and single market. The experience gained during any transition period should be used to identify specific administrative arrangements required to avoid trade disruption along triangular supply chains following the UK’s departure from the EU customs union and single market. In support of a political initiative in this regard the ACP Secretariat could usefully seek funding from the development cooperation programmes of EU27 member states with the greatest commercial interest in trilateral trade (the Netherlands and Belgium). Such a study would seek to identify the scale of the challenges which could arise in the functioning of triangular supply chains under various Brexit scenarios. This should then be fed into a process aimed at identifying the policy initiatives required to minimise disruption of triangular supply chains. |
Sources:
(1) Freshplaza.com, ‘High demand for Dominican long beans in Europe’, 16 August 2017
http://www.freshplaza.com/article/179856/High-demand-for-Dominican-long-beans-in-Europe
(2) Freshplaza.com, ‘Dominican freshness and international freight connections’, 16 August 2017
http://www.freshplaza.com/article/179880/Dominican-freshness-and-international-freight-connections
(3) Freshfel, ‘Impact of Brexit on the European Fruit and Vegetable Industry’, 3 August 2017
http://freshfel.org/wp-content/uploads/2017/08/20170803-Freshfel-Inventory-for-BREXIT-negotiations.pdf
| Key words: Horticulture, Dominican mangos, Asian vegetables, aromatic herbs,pineapples, avocados, Dominican Republic Area for Posting: Horticulture, Caribbean EPA, East Africa EPA West African EPA, BREXIT |