CAOBISCO calls on EU and UK to extend FTA talks

Crucial talks are scheduled next month on whether a new EU-UK trading relationship can be agreed, after months in which Brexit has been pushed off the political agenda by the coronavirus crisis, and tensions are rising between the two parties.

With 12 national associations and seven direct member companies, CABISCO represents an annual production of around 12.1 million tons, a workforce of more than 300 000 people and 13 000 companies (99% SMEs).

“The social and economic impact the COVID-19 crisis has on the chocolate, biscuits and confectionery sectors will have to be measured but the cost will be high. In this context, it makes sense to provide our industries with elements of certainty in a volatile time and thus, extend the transition period​,” a spokesperson said.

CAOBISCO EU-UK trade in figures:

• CAOBISCO products (confectionery, chocolate and fine bakery wares) are the top food and drink products traded with the UK (total trade represents more than €6bn or $6.58bn, per year). Biscuits/pastries and chocolate are respectively the second and third most valuable group of food exports from the EU to the UK, and the second and fourth most valuable food imports to the EU from the UK. (Source Eurostat)
• In 2019, more than 1.5 million metric tonnes of CAOBISCO products were exported to the UK representing a value of around €5 billion. Imports from the UK to EU27 represented roughly 500.000 MT (around €1.6 billion). Ireland imports more than 45% of CAOBISCO products from the UK.

These figures show a highly integrated and inter-dependent EU-UK trade in our products, CAOBISCO said. The industry would thus be heavily impacted by potential market imbalances if EU-UK trade were to be disrupted by any kind of trade barriers. Disruption to trade is in the interest of neither side.

“A no-deal BREXIT or a bad deal as of 2021 would be hugely detrimental to our industry, and the whole food supply chain with a significant decrease in EU exports and revenue coupled with more important job losses​,” the spokesperson said.

“We are hopeful that, in order to preserve business activities between the EU and the UK, a balanced and ambitious trade agreement with appropriate product-specific rules of origin will be implemented as of day ONE of the end of the transition period​.”

The association says it strongly recommends taking the following elements into consideration in any future trade agreement between the EU and UK:

• Rules for our product chapter HS 1704 – confectionery products, HS 1806 – chocolate products and HS 1905 – fine bakery wares must be based on the value criteria. It makes the application of preferential treatment legislation easier, especially for small and medium-sized enterprises. These rules currently apply to the movement of goods within the European Economic Area (EEA), with Switzerland and in the Pan-Euro-Mediterranean region, reducing the load of new administration tasks on companies and keeping their liability risk at a manageable level.
• Full bilateral and diagonal cumulation between the UK, the EU and shared preferential trade partners to protect the close and integrated supply chains between UK and EU food and drink producers have built over the last decades.
• A joint EU-UK exemption for all originating imports from least developed countries (LDCs). It is the morally correct thing to do to ensure exporters from these countries are not inadvertently disadvantaged by changes in the EU-UK trading relationship.

It says the UK’s status as a third country, no longer being part of the EU Union Customs Code, will lead to more red tape in customs procedures and that the EU-UK FTA should include a framework of permanent cooperation to facilitate procedures and minimise border checks by addressing risk management techniques and security measures.

CABISCO has also called for simplified customs procedure and has called on EU negotiators to maintain free trade between the UK and EU27 in the future, preserving trade from any tariff and non-tariff barriers. It also says the FTA between the EU27 and the UK must also ensure tariff- and quota-free trade for CAOBISCO products and its agricultural ingredients (sugar, dairy, cereals, cocoa, dried fruits and nuts), in order to continue to operate in Europe.