Tag: tariffs

Posted on

Navigating the EU-U.S. trade relationship

2025 marked a decisive break in relations between the United States and Europe. From U.S. Vice-President Vance’s speech in February at the Munich Security Conference to the publication of the U.S. National Security Strategy at year’s end, Washington has framed the European Union not as a strategic partner but as an obstacle to U.S. objectives. This shift was illustrated throughout the year by escalating trade actions, growing divergence over Ukraine, and threats against tech regulation. By the end of the year, the EU had accepted an unequal trade deal with the United States, undermining its long-standing self-image as a ‘soft power’.

The EU is also addressing mounting tensions with China, a consequence of the widening Chinese trade surplus, its willingness to assert its control over rare earths and magnets, and a series of tariff actions affecting particularly agri-food products. Trade relations with Russia have been subject to restrictions since the Russian invasion of Crimea in 2014 and subsequent sanctions following its invasion of eastern Ukraine.… Read the rest

Posted on

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

Posted on

The protective effect of EU agricultural tariffs

The 2019 EU Trade Policy Review was recently published by the World Trade Organisation (WTO). The trade policy review process takes place every two years for major economies and is an important transparency tool. The country under review produces a policy report summarising major trade policy developments since the last review. A second report is written independently by the WTO Secretariat. These reports are then discussed by the full membership in the WTO’s Trade Policy Review Body. Indeed, the EU received more than 1,600 written questions from other WTO members on these reports to which it has provided written answers (unfortunately, the latter files are restricted and not publicly available on the WTO website).

The Secretariat’s report is a useful source of data and includes a section on agricultural tariffs. Most of the attention to agricultural policy in the EU in the past two years has been directed to domestic support in the context of the proposed changes to the CAP framework for the period after 2022.… Read the rest

Posted on

Which EU countries will bear the brunt of a hard Brexit?

The withdrawal of the UK from the EU (Brexit) will have a negative economic effect both for the UK but also for the EU. The size of these negative effects will depend, in part, on the nature of the future trade relationship that may be negotiated if the Article 50 negotiations on withdrawal are successfully concluded and, in part, on the nature of the transition arrangements, if any, that may be agreed to bridge the period between Brexit Day and the entry into force of a future trade agreement.
The UK government’s objective for the long-term relationship remains that set out in the Lancaster House speech last January, namely, withdrawal from the Single Market and from any type of customs union with the EU, but agreement on an ambitious free trade agreement. However, the UK government has yet to spell out what exactly an ambitious free trade agreement might entail.
There seems also to be a growing acceptance by the UK government that the original British bravado that both the withdrawal negotiations and the future relationship could be done and dusted within a two-year period as part of the Article 50 negotiations was just a nonsense (even if the Foreign Minister Boris Johnson seems not yet to have got the message).… Read the rest

Posted on

WTO EU Trade Policy Review 2013

Every two years the WTO secretariat undertakes a review of the EU’s trade policy including agricultural policy measures which affect trade. The agricultural section of the review builds on the EU’s notifications to the WTO under various agreements, notably the Agreement on Agriculture (particularly the notifications on domestic support, export subsidies and tariff rate quota utilisation) and the notification under the Agreement on Subsidies and Countervailing Measures. The latest EU trade policy review for 2013 was released last week following discussion in the WTO Trade Policy Review Committee.
The Trade Policy Review provides succinct summaries of the relevant EU farm legislation and policy instruments, even if some of its data (for example, on levels of domestic support) are a little outdated because of the time required to submit the relevant notifications.
The report updates information on levels of agricultural tariff protection provided to EU farmers to 2013.… Read the rest

Posted on

OECD reports EU farm transfers at lowest level ever

The OECD produced the 2012 edition of its Agricultural Policy Monitoring and Evaluation report during the week. This is the publication that keeps tabs on the transfers to and from farmers and consumers as a result of government policy interventions. It also usually contains a chapter on a special theme, which this year is devoted to fostering innovation and productivity growth in agriculture.

General findings

The results are summarised in a series of indicators, of which the most well-known is the Producer Support Estimate (PSE) usually expressed in percentage terms. It measures the percentage of farm receipts in a country that is due to public policies.

Another useful indicator is the Nominal Protection Coefficient (NPC) which measures the ratio between the average price received by producers (at farm gate), including payments per tonne of current output, and the border price (measured at farm gate).

The report finds that in 2011 support to producers across the OECD area amounted to €182 billion as measured by the Producer Support Estimate (PSE).… Read the rest

Posted on

How the EU market looks to food exporters

In a recent post I looked at estimates of the overall level of protection to EU agriculture and how they compare to other countries. However, the EU trade regime is highly discriminatory. Different countries face different tariff regimes depending on the nature of any trade agreements they have with the EU or the preferential trade regime from which they benefit.
The average applied tariffs calculated in the MAcMap global tariff database I discussed in the previous post take account of these preferential tariffs. However, the published report only presents the overall EU average tariff. In this post, I make use of data from the WTO World Tariff Profiles to examine differences in the market access tariff barriers faced by different groups of exporting countries to the EU.
Few countries face the standard Most Favoured Nation (MFN) tariffs. They are the developed countries (for example, US, Australia, New Zealand, Canada) with whom the EU has not negotiated a preferential trade regime.… Read the rest

Posted on

Will the right tariff average stand up?

How heavily protected is EU agriculture by import tariffs? How does EU agricultural protection compare with other countries? To answer these apparently simple questions requires a huge amount of spadework, and we will see that there are different answers which can all lay claim to be ‘correct’. Fortunately, a joint team at the Centre d’Etudes Prospectives et d’ Informations Internationales (CEPII) in Paris and the International Trade Centre (ITC) in Geneva undertakes this necessary legwork and publishes their results every three years as the MAcMap-HS6 (Market Access Maps) global tariff database. MAcMap Version 3 covering tariff data for the year 2007 has just been published. It’s an impressive resource – the Version 2 database took up 8 GB of disk space! Hats off to the researchers involved, Houssein Guimbard, Sébastien Jean, Mondher Mimouni and Xavier Pichot.
A picture of global agricultural protection

A unique feature of MAcMap is to allow a meaningful average level of applied protection worldwide to be computed.… Read the rest

Posted on

How the CAP contributes to world market food price volatility

The contribution of export bans to the world food price spike in 2008 is now well-established, particularly for commodities such as rice (for example, see Abbott, 2012 and Sharma, 2011). Martin and Anderson (2012) have calculated that over the 2005-2008 period more than 45 per cent of the explained change in the international price of rice was due to changes in border restrictions that countries used in an attempt to insulate themselves from the initial increases in price.

Countries resort to export bans in an attempt to keep down the price of food to domestic consumers. When undertaken by countries whose level of trade is big enough to influence the world market price, then an export ban also has ramifications for other countries.

Not only does an export ban, such as the Russian grain export ban in August 2010, by restricting supplies to the world market have an immediate impact on world prices.… Read the rest