Month: January 2021

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Level playing field provisions in the EU-UK TCA

My previous post discussed the general background to the EU-UK Trade and Cooperation Agreement (TCA) and specifically its provisions on tariffs and non-tariff barriers.  An innovative part of the Agreement concerns what are called ‘level playing field’ provisions in various areas including state aids, taxation, competition policy, labour standards, and environmental protection and climate change.

By demanding that the Agreement address these issues, the EU wanted to avoid a situation where the UK could use government subsidies, a more beneficial tax regime or more lenient regulatory standards to give its producers an advantage in competing with EU producers in the tariff-free free trade area which might be seen as unfair.

The Agreement includes reciprocal commitments not to reduce the level of environmental or climate protection or fail to enforce laws in a manner that affects trade or investment (the so-called ‘non-regression’ clause). Both sides have the right, in certain circumstances, and subject to arbitration, to take countermeasures if they believe they are being damaged by measures taken (or not taken!)… Read the rest

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The EU-UK Trade and Cooperation Agreement

Let us be clear at the outset. Brexit was always going to be a lose-lose situation for both the UK and the EU. Having said that, the Trade and Cooperation Agreement (TCA) agreed on Christmas Eve between the UK and the EU which provisionally entered into force on 1 January this year was a very significant achievement for the two negotiating teams.

It represents a significant improvement over the ‘no deal’ Brexit that had threatened in the previous weeks. Critically, it prevents the imposition of tariffs on UK-EU trade, although subject to rules of origin to determine eligibility for the zero-tariff preferences. As important, it provides an agreed basis on which to develop the longer-term relationship between the two parties. This is far preferable to the outcome we would have faced if there had been a bad-tempered break-up followed by a debilitating blame game.

The Agreement respects the red lines of both parties.… Read the rest

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Eco-schemes a work in progress

This post is written jointly with Dr. Norbert Röder of the Thünen Institute Federal Research Institute for Rural Areas, Forestry and Fisheries.

Eco-schemes (schemes for the environment and climate) are the main innovation in the green architecture of the CAP proposed by the Commission in its draft CAP Strategic Plan Regulation in June 2018. As mandatory instruments, they would oblige Member States to allocate a proportion of their Pillar 1 payments to schemes that would directly benefit the environment and climate. Participation would be limited to genuine farmers but would be voluntary for them.

Both the Council and Parliament have proposed amendments to the Commission’s original proposal. On the one hand, the amendments would ring-fence a minimum budget for eco-schemes at 20% (the Council) or 30% (the Parliament) of Pillar 1 national envelopes for direct payments. On the other hand, the amendments would greatly enlarge the scope of eco-schemes. Under the Commission’s proposal, these are to be used to achieve the CAP specific goals (d), (e) and (f) related to climate and environment.… Read the rest

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COVID-19 leaves limited traces in preliminary 2020 agricultural accounts

Eurostat has now published its preliminary estimates for the economic accounts for agriculture in the EU for 2020. This gives us the first authoritative overview of the impact of the COVID-19 pandemic on agricultural markets and farm incomes in what has been an extraordinary year. Until now, information on monthly trends in agricultural prices and agricultural trade has given us some partial insights into the impact of COVID-19 on the agricultural sector. Despite wobbles in some sectors, by and large these indicators show that the agricultural sector has been remarkably resilient. Despite this, significant aid packages have been made available to farmers by EU Member States. These preliminary estimates of the 2020 agricultural accounts give us a status update over these developments.

The accounts confirm a small fall in the value of EU agricultural output in 2020 and a greater fall in farm income compared to 2019, although not all of this is linked to COVID.… Read the rest

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Farm consolidation continues

How farms are structured in the EU has become the focus of increasing attention as a result of growing political concern over trends in farm consolidation and farmland concentration. This political interest has focused on different elements of structural change in EU agriculture. For some, the focus has been on land grabbing and the rise of large-scale land deals; for others, it is safeguarding the position of the family farm; for some, it is opposition to industrial farming and the growth of ‘mega’ farms; for others, it is defence of small farms, often seen as integral to food sovereignty; for some, the issue is generational renewal; while yet others focus on the decline in the overall number of farms. Common to all is the view that current patterns of farm structural change should be halted or even reversed.

Interestingly, this view is at variance with the objectives set out for the Common Agricultural Policy (CAP) in the Treaty of Rome and repeated in the Treaty on the Functioning of the European Union.… Read the rest