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EU Trade Update


Dairy remains one of the last major blockages to the conclusion of a trade agreement with the South American Mercosur countries of Brazil, Argentina, Paraguay and Uruguay. A recent round of technical talks revolving around market access, Geographical Indicators and TRQ management provided little overall progress, as the EU seeks extensive concessions in return for potentially very significant market access for the Mercosur beef and sugar sectors.

Canada: Issues regarding the implementation of the EU’s Cheese TRQ                                                

ICOS is concerned about the implementation of CETA particularly relating to the management of the EU TRQs. The CETA trade agreement, between the EU and Canada, provided a new TRQ for non-industrial EU cheeses, to be phased in from 2017 to 2022. However Canadian cheese manufacturers were given responsibility for the management of 50% of the TRQ, with the possibility to decide if and when to import EU cheeses. The other 50% operates on a costly, unpredictable, and speculative transfer system. As a result, as of July 2018, only 22% of the overall 2018 EU cheese TRQ has been used. This clearly shows that the Canadian TRQ administration system does not facilitate EU traders access to the Canadian market. As the CETA agreement has in many ways formed a template for the EU’s trade deals, it is vital that this management system is addressed and responsibility given solely to Canadian retailers, therefore ensuring that consumer demand can drive market access.

New Zealand: Negotiations Kick Off                                                                                                                    

Negotiations formally begun between the EU and New Zealand on the 21 June and the first round of discussions took place on July 16-20. New Zealand are reported to be pushing heavily for a co-liberalisation of each other’s dairy markets. ICOS calls for the Commission to proceed cautiously with these negotiations, particularly in light of Brexit and the impact it will have on the EU’s market for key New Zealand agri-food imports and the lack of any real market potential it offers to EU exporters.

Japan: Done Deal!                                                                                                                                                             

EU and Japanese leaders signed the Economic Partnership Agreement on Tuesday, 17 July, in the first step of the ratification process. The agreement, which provides major gains for EU cheeses, among other sectors, is then expected to be voted on within the European Parliament before the end of year, with the hope that it will come into force in early 2019.

US: Tensions Escalating                                                                                                                                             

Trade tensions are building between the EU and the US, with the EU placing punitive tariffs on US products, including a range of agri-food products, in response to US tariffs on EU steel and aluminium imports. With the US now expected to introduce a further 25% tariff on cars, the EU is preparing a further list of US products worth €18bn to target in return. There are particular concerns as to the impact these trade tensions, and the equally escalating trade war between the US and China, will have on global soybean prices in particular.

Alison Graham                                                                                                                                                 

European Affairs Executive