Q&A: European Commission explains new Entry Price System for fruit & veg
The Moroccan produce industry and government have been up in arms recently over changes in European law toward produce pricing. One consultant has claimed it will affect between 30-50% of the North African country's tomato exporters, but the European Commission's spokesman for Agriculture and Rural Development, Roger Waite, says the new regulations do not apply specifically to Morocco, and nor do they relate to the preferential import quotas granted to the country's tomato exporters. He tells www.freshfruitportal.com about the fine details of what has become a divisive topic between the EU and its neighbors to the south.
In simple terms, what do the new delegate acts mean practically for Moroccan fruit and vegetable growers wishing to continue exporting to the European Union?
The changes to the Entry Price System, which will apply from October 1, 2014, were in fact decided in the CAP (Common Agricultural Policy) reform agreement last June (2013).
It applies to all fruit and vegetables from all exporting countries outside the EU. Following pressure from Member States (the Council) and MEPs (Members of the European Parliament), the political agreement was to align the system with the one that applied to other products.
In other words, the price figure on the basis of which the customs clearance will be calculated will be either the invoice for the individual consignment, or the Standard Import Value, which is published by the European Commission per product and per country of origin every day.
At present, there is a third option, which only applies for fruit and vegetables under the entry price system - but not for other products - allowing for a “deductive price”, which enables traders to use an invoice for the consignment when it is sold on the EU market. This is a much less transparent system, and one which has triggered accusations from some MEPs and Member States that it enables importers to elude some of the import duties that would otherwise be due.
For those exporters whose business model for trading fruits or vegetables in the EU is based on consignment, how will they have to change their business practices to adjust to this new legal framework?
Quite simply, the import duty will be based on the price on the invoice – or will be calculated on the basis of the Standard Import Value, as published every day by the European Commission.
Many of the complaints have come from Morocco. Why is that so?
As previously mentioned, the change in the rules applies to all imports from all third countries.
What scope is there for adjustments of the delegated acts to both be simple from the European end, but also viable from the Moroccan end?
The political decision to change the system was taken last June (and published in December). This is covered in the so-called Basic Act [the political legislation]; The Delegated Act merely provides more detail of how the elements of the Basic Acts will be implemented in practice.
How concerned is Agriculture Commissioner Ciolos for the livelihoods of Moroccan tomato growers who are expected to be most impacted by the reforms? On that note, how does he feel about the Moroccan Agriculture Minister Akhannouch's claims that the new pricing system is both “astonishing and incomprehensible”?
I must underline that this change only covers non-preferential imports. Under the bilateral trade agreement, the preferential quotas granted for EU imports of Moroccan tomatoes (269 000 in 2013/14 and 277 000t in 2014/15) will not be affected. Given that these quotas account for more than two thirds of Moroccan tomatoes, we feel that potential impact is considerably less dramatic than has been claimed from the Moroccan side.
Pawel Jerzy Plewa, Director-General of the European Commission's Agriculture Department, has indicated his intentions to visit Morocco to address the matter. What knowledge do you have about the details of this visit, and in what way will Commissioner Cioloș be assisting Mr Plewa Jerzy in any way in either the trip or his preparations?
Mr Plewa is visiting the Meknes Fair in Morocco this week, where the EU is the guest of honor at the international fair. This was a long-standing commitment. Indeed, Commissioner Cioloș was originally invited, but was not able to go because of another commitment, and so he asked the Director-General to go in his place.
As previously mentioned, we don’t share the Moroccan assessment of the potential impact of these changes. In this context Mr Plewa is willing to sit down to discuss the differences in our analysis, in particular to see where the Moroccan side feels most vulnerable.
Commissioner Cioloș spoke to the Moroccan Minister of Agriculture about the situation last week, and Director-General Jerzy Plewa will continue the discussions this week. However, it is very difficult to see how much flexibility is available given that the political decision has already been taken to change the system to a simpler, more transparent system aligned with other products.
What degree of consultation has taken place with Morocco in forming these delegate acts?
This is a change in EU rules, not specific to Morocco. Nevertheless, the Commission has taken very careful note of the concerns expressed by the Moroccan authorities that these changes will negatively impact their fruit and vegetable exports.
A detailed discussion of those concerns already took place in February, in the Agriculture sub Committee established under the EU Morocco Association Agreement. Commission Services have proposed to pursue these discussions, in particular so as to better understand the quantitative basis on which the Moroccan Authorities have estimated that there could be a negative impact.