Redefining the basis for ACP solidarity

The negotiation of the Lomé Convention by the ACP group from 1973 to 1975, with its non-reciprocal trade preferences, its binding aid commitments and structures of political dialogue, was an impressive achievement, with effective ACP political solidarity facilitating the exploitation of the evolving geo-political situation to secure substantive concessions.

However, with a radically changed geo-political context, over time the EU has introduced changes to the ACP-EU relationship which has undermined the objective basis of ACP solidarity. ACP countries now trade under widely differing tariff regimes and compete for available aid resources, following the introduction of a “use it or lose it” element to traditional aid programming. This has given rise to a need to redefine the basis for ACP solidarity and collective action.

This article reviews the objective common interests amongst ACP member states in the agro-food sector and suggests this could provide one of the planks for a rejuvenated ACP Group. In redefining the objective common interest of the ACP in taking action at the ACP Group level it is important to:

a) clearly identify those specific activities which carry a real value added through collective ACP Group action;

b) define ACP level actions in ways which are complementary to and supportive of actions at the national and regional level, as well as initiatives undertaken at the multilateral level in association with specific multilateral institutions and agencies.

c) build on the existing ACP institutional structures in tackling current issues which currently hinder ACP agro-food sector trade.

Ensuring closer consultation on the application of official Non-Tariff Measures

In the agro-food sector ACP member states have an objective common interest in getting to grips with the application of Non-Tariff Measures (NTMs) in ways which create new barriers to trade and which are threatening to disrupt long established ACP export patterns.

The reality is that NTMs are increasingly important to patterns of ACP agro-food sector trade, indeed SPS and food safety measures are increasingly the principal obstacles to ACP Group agro-food sector exports to the EU. 

To date, while affected ACP exporters and national governments have sought bilateral consultations to resolve the specific issues faced, limited success has been achieved. 

This is largely due to the absence of clearly defined structures for the exchange of information on planned changes and consultations on the scientific basis for such changes. The establishment of such structures can be seen as an important priority for collective ACP action, for this would address an increasingly important issue in ACP-EU agro-food sector trade.

Thus while compliance with SPS an food safety requirements is primarily a national and corporate responsibility, at the ACP level the issue is about 

a) ensuring dialogue structures are set in place which prevent the application of NTMs in ways which become barriers to trade and 

b) establishing mechanisms for dispute resolution where conflicts emerge over the application of NTMs.

Establishing a  regulatory framework for private standards

In addition there is a need to work with the EU on the regulatory framework for the design and application of private standards.  To date little policy attention has been paid to the market and trade implications of these private standards, yet these private standards are affecting a growing level of ACP exports. Illustrative of this is the June 2012 decision of fruit and vegetable sector stakeholder in the Netherlands to convert to 100% sustainably certified sourced fruit and vegetables by 2020. 

Against this background the absence of a regulatory framework for private sector standards  can be seen as an important policy lacuna, with potentially serious consequences for ACP exporters. 

There is a need for ACP agro-food exporters to be assisted in getting ahead of the curve on private standards, by establishing clear guidelines and codes of conduct for the elaboration and application of private standards. This potentially constitutes an important area for collective ACP Group action in initiating dialogue with the EU on the regulatory framework for private standards.

Moving forward together on production process requirements 

A more recent trend in the EU has been towards linking market access to the use of specific production processes. While this is primarily being applied in the fisheries sector , it could potentially affect a range of ACP agro-food sector exports.

This emergence of production process related market access requirements would appear to be another area for concerted ACP Group action vis a vis the EU. Early, informed intervention at the political level to ensure the establishment of mutually agreed, objectively variable benchmarks for the application of production process requirements to market access, could avert serious market access problems for ACP exporters in the future in sectors as diverse as palm oil, livestock products and cocoa, tea and coffee.

Retaining the right to use traditional agricultural trade policy tools

ACP group members have a common interest in retaining the right to use traditional agricultural trade policy tool in support of the structural transformation of agro-food sector engagement with global food supply chains. 

Currently there is a fundamental contradiction between what the EU has been advocating in the context of the EPA negotiations and the actual trade practice under the CAP. The EU actively uses a wide range of agricultural trade policy tools, ranging from: high MFN tariffs; variable tariffs; seasonal tariffs; tariff rate quotas; import licenses;  export licenses; special safeguard arrangements; and should the market situation warrant it export restitution payments. This policy tool range would be the envy of most ACP governments.

Against this background maintaining the policy space for the use of traditional agricultural trade policy tools in support of agro-food sector development constitutes a further area for concerted action by the ACP Group.

Identifying value added areas of joint ACP action in support of market diversification

ACP Group members also have an objective common interest in market diversification to capitalize on shifting patterns of global demand, in ways which support a structural transformation of the basis of ACP engagement with the global agro-food economy. 

All ACP countries face a common problem in promoting this agro-food sector market diversification, namely meeting SPS and food safety requirements in new target markets.In this context there would appear to be scope for cooperation across the ACP on a joint programme for facilitating the negotiation of SPS and quarantine protocols (e.g. with China), with this helping to overcome human resource constraints on the approval process.

In addition across the ACP opening up the ‘black box’ of the specific patterns of evolving consumer demand in rapidly growing markets can be seen as critical in engaging in new export patterns which deepen the structural development of ACP agro-food sectors. 

Given the scale of these markets there is little danger of ACP exporters competing with each other. This suggests there would appear to be a strong objective basis for pan ACP Group collaboration in the initial stages of identifying both evolving market trends and how most effectively to tap into these trends in support of structural transformation processes in the agro-food sector.

This is particularly the case since across a range of sectors collective initiatives are likely to offer a more cost effective way of getting to grips with the challenges faced than purely national or regional actions, given the commonality of the basic challenges faced.

It needs to be recognised of course that while initial steps can most effectively be supported at the all-ACP level, the full exploitation of market opportunities would need to devolve down to the enterprise level in individual countries.  This however should not disguise the greater cost effectiveness of  well managed collective initiatives at the ACP level.

Conclusion

Taken together these areas constitute quite an agenda for collective, effective  ACP Group action in support of the structural transformation of the basis of ACP agro-food sector engagement with the global economy.  The challenge will be in developing operational programmes in these areas, given the current institutional constraints faced.  Overcoming these institutional constraints will require strong political leadership from ACP governments in pushing to the limits existing institutional structures in picking up and running with this new ACP agenda.

This article is drawn from a report under preparation for ECDPM on “Supporting Structural Transformation in the ACP Agro-Food Sector: Deepening Intra-ACP Cooperation” . It forms part of an emerging programme of support by ECDPM for the ACP Working Group of the Future of the ACP.

* The views expressed are entirely those of the author. They do not necessarily represent the views of the ACP Group or any of its member states, the ACP Secretariat or the ACP Eminent Persons Group.