Impact of the EU-UK Trade Agreement on Caribbean Exporters

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The Impact of the EU-UK Trade andCo-operation Agreement on Caribbean Exporters

Table 1. Caribbean sugar exporters to the UK, 2019

Country

Tonnage

Value (€)

%UK extra-EU imports (vol.)

Belize

161,091 47,951

51,191,672 14,409,618 1,936,466

34.5% 10.3%

Guyana Jamaica Barbados

6,000

1.4% 0.1%

300

232,587

Total Caribbean ACP

215,342

67,770,343

% total extra-UK sugar imports Total UK extra-EU imports

46.2%

466,403 160,916,359 Source: European Commission Market Access Database, https://trade.ec.europa.eu/access-to-markets/en/ statistics?includeUK=true

This arises as a result of the rules of origin applicable to refined sugar exported along GB– EU supply chains. Under the rules of origin of the EU–UK TCA, a change in tariff heading (CTH) is required for originating status to be granted to refined sugar traded between the EU andGB. Since themovement fromrawsugar (HS 170191) to white sugar (HS 170199) involves only a change in tariff sub-heading (CTSH) and not the CTH stipulated in the product-specific rules of origin of the TCA (Annex ORIG-2), the simple processing of raw cane sugar into refined sugar will not secure ‘originating’ status under the TCA for the white sugar produced. Originating status can be retained only if Caribbean sugar remains under customs supervision throughout the refining process. However, the provisions of the CTC applicable to goods in transit require that no manipulation of the product should take place while the good remains under the transit procedure.

This creates a situation where Caribbean raw sugar, if refined in the UK or EU, becomes a ‘stateless good’ when traded across an EU– GB border, in terms of the application of tariff preferences. As a consequence, Caribbean raw sugar refined in GB faces the standard MFN tariff of €419/tonne when re-exported to the EU and that refined in the EU faces a UK MFN tariff of £350/tonne when re-exported to GB. This is creating serious commercial obstacles to the continued EU–UK trade in refined sugar produced on the basis of imports of raw cane sugar from Caribbean ACP countries. In terms of Caribbean exports, the main concern relates to GB-to-EU trade flows, given the much higher value of Caribbean exports to the UK market compared with EU27 markets. In 2019, UK white sugar (17019910) exports to EU member states were valued at €84.8 mil- lion, with a further €10.5 million under the category of other sugars (17019990). This trade

Table 2. Value of UK white sugar (17019910) and other sugar (07019990) exports to the EU trade by main trade partners (€2 million+)

UK white sugar exports to the EU

UK other sugar exports to the EU

Tonnes

Value (€)

Tonnes

Value (€)

Total

184,373

84,795,824

9,861

10,474,759

Country

Country

Ireland

46,573 32,026 30,625 16,502 16,433 14,125 10,094

20,046,971 13,467,278 13,451,882 9,359,235 7,493,551 5,922,550 5,180,490 3,175,103

Ireland

1,586 2,383 1,884

2,537,365 3,037,504 1,314,181

Belgium

Belgium

Italy

Spain

France Greece

Netherlands

Germany

Spain

7,230

Source: European Commission Market Access Database, extracted 14 September 2021, https://trade.ec.europa. eu/access-to-markets/en/statistics?includeUK=true