Summary:
While the immediate concern is to preserve current ACP preferences, in the longer term serious preference erosion challenges will be faced. Where the UK has no agricultural production interests (e.g. bananas and citrus) there will be little incentive to maintain EU tariffs. However for five years tariff preferences may remain given the complexity of some trade negotiations. The UK’s future agricultural policy will also affect ACP preferences, notably: whether the UK retains EU CAP-related special agricultural levies.
If ACP countries can find a way of preserving their current preferential access to the UK market from day 1 of the UK’s departure from the EU, this will still leave open the question of the future value of such preferential access to the UK market. This will be be critically determined by the nature of the post-BREXIT agricultural and agricultural trade policy pursued by the UK.
If the UK abandons the CAP and leaves the EU customs union (a likely outcome), there are a range of products where the maintenance of high MFN tariffs will no longer make any sense for the UK (e.g. for citrus imports and banana imports, where there is no domestic UK production).
This could either, in the short term or more likely in the longer term, significantly erode the value of tariff preferences granted ACP countries, in ways which, in the case of the a range of ACP countries, could fundamentally undermine the commercial attractiveness of the UK market for current exports.
This will need to be assessed at the country/sector level in the light of the evolution of the UK’s domestic agricultural policy debates and the UK’s future trade relationship with the EU27.
In this context it is important to look at the future value of ACP preferential access to the UK market in a short term perspective (immediate post-BREXIT and first 5 years of the post BREXIT period) and the longer term perspective (beyond 5 years as the UK operationalizes its new trade framework, setting in place new bilateral trade arrangements with a host of non-EU trade partners).
While across a range of products of export interest to ACP countries the UK government will have no domestic production interest in retaining high MFN tariffs, the UK government, may wish to retain in place the high ‘inherited’ EU tariffs, so as to have some trade concessions to make in the negotiation of new UK bilateral free trade area arrangements with a range of non-EU partners.
Thus, depending on the nature of the immediate post-BREXIT trade regime set in place by the UK authorities for ACP LDCs and EPA participating countries, ACP exporters could retain significant tariff preferences on the UK market, despite the dubious long term value of such preferential access.
More immediately however, if the UK decides domestic UK agricultural policy should no longer be aligned with the CAP, then this may also entail the dismantling of CAP related levies imposed on MFN suppliers. This unilateral action linked to changes in UK agricultural policy, could come to constitute the most immediate threat of preference erosion which ACP exporters to the UK market face.
Sources:
Analysis extracted from: EC, market access data base, tariffs section
http://madb.europa.eu/madb/datasetPreviewFormATpubli.htm?datacat_id=AT&from=publi
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Comment and Analysis Careful monitoring will be required to assist ACP agro-food exporters in adjusting to the changing policy and associated market context, in a UK which is no longer tied to EU agricultural and agricultural trade policy processes and instruments.
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Key words: BREXIT, LDCs, non-LDCs Area for Posting: BREXIT, EPA General, SADC EPA, West African EPA, central African EPA EAC EPA, ESA EPA, Caribbean EPA, Pacific EPA
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