Trade with the European Union (EU) is likely to get tougher, both for importers and exporters. The EU is tightening up on both aspects.
On the EU import side, the EU will implement a new “Green Deal” next year, designed to ensure compliance with climate change objectives. This includes a “Farm to Fork” strategy that affects all food produced or consumed.
Agricultural economist Wandile Sihlobo says South African agricultural exports to the EU will be affected by a new code of conduct on trade policy, which will require commitments from countries like South Africa on pesticides, animal welfare and microbial resistance. This could face producers with regulatory uncertainty and a high cost of compliance.
On exports, the EU has just unveiled its first annual report on the stronger implementation and enforcement of trade rules. The aim is to extract maximum value from trade deals by ensuring all trade partners comply with their obligations to the EU. It estimates that the tougher approach resulted in additional EU exports worth €5.4 billion (abut R94 billion) in 2020.
EU Trade Commissioner Valdis Dombovskis describes it as “an assertive trade policy” which is “about ensuring our partners honour their international commitments and, in the process, directly support European businesses and jobs”.
None of this is good news for the South African poultry industry. Watch for a harder EU line on South African efforts to keep dumped and predatory chicken imports out of the country, and new obstacles in getting health certification for chicken exports to the EU.