Import threat as doors open to east

By Philip Clarke

NEW trading arrangements with central and eastern European countries came into force this week, paving the way for increased food imports from the former Communist bloc.

From last Monday, sales of a number of agricultural commodities have been made easier following the introduction of the so-called “double zero” option. Under this policy, certain products may move between the EU and the CEECs free of import tariffs and export refunds.

So far deals have been concluded with nine countries, the idea being to progressively introduce free trade in the run-up to full accession to the EU. The broad categories are:

• Least sensitive products, such as citrus fruits, olive oil and horse meat: Full liberalisation for unlimited amounts comes in immediately.
• Products subject to limited EU protection, such as pigmeat, poultry and fruit and vegetables: Zero tariffs/refunds apply up to a “normal” volume of trade.
• Sensitive products, such as cereals, oilseeds, beef and sheep: No further liberalisation of trade.

The commission estimates that the deals, negotiated with each candidate country over the past 15 months, will see the proportion of their food exports to the EU exempted from duties climb from 36% to 77%.

Duty-free exports from the EU to the CEECs will increase in return, from 20% to 37%.

“This is a firm step forward in increasing free trade between us, preparing the applicant countries for the single market,” said EU farm commissioner Franz Fischler.

Despite this, the EU is likely to remain a major net-exporter to the region. Currently it sells 2.7bn (1.73bn) of agricultural goods to the CEECs, compared with the 1.8bn (1.12bn) worth it imports.

The introduction of double zero arrangements should certainly be seen as a positive, says NFU policy director Martin Haworth.

“When the Berlin Wall came down everyone expected that we would be hit by a flood of cheap imports from the east. But this has not happened and we have expanded our exports to them,” he said.

“Part of the reason has been that their quality has not been up to western standards. They have also suffered a contraction in their agricultural output.”

The two-way elimination of import duties should give EU exporters a further boost, he says.

And, with the volume of export subsidies already limited under GATT, the fact the EU will no longer be using them on sales to the CEECs, should provide scope to target other world markets.