Hinweis zum Urheberrecht
Bericht / Forschungsbericht / Abhandlung zugänglich unter
URL: https://epub.sub.uni-hamburg.de/epub/volltexte/2009/1450/
SPECIFIC CONVENTION N°3: RULES OF ORIGIN IN PREFERENTIAL TRADE ARRANGEMENTS NEW RULES FOR THE FISHERY SECTOR
Oceanic Développement, MegaPesca Lda
| Originalveröffentlichung: |
| (2007) http://ec.europa.eu/fisheries/publications/studies/fish06_20_en.pdf |
| pdf-Format:
|
|
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| BK - Klassifikation: |
| 48.67 |
| Sondersammelgebiete: |
| 21.3 Küsten- und Hochseefischerei |
| DDC-Sachgruppe: |
| Biowissenschaften, Biologie |
| Dokumentart: |
| Bericht / Forschungsbericht / Abhandlung |
| Sprache: |
| Französisch |
| Erstellungsjahr: |
| 2007 |
| Publikationsdatum: |
| 10.05.2009 |
| Kurzfassung auf Deutsch: |
| This is the final report of a study regarding a Commission proposal to modify the preferential trade
arrangements, and the potential impacts of this proposal on the trade in fishery and third country and
EC stakeholders. Central to this reform are the rules of origin (RoO) that determine the eligibility of
products for preference. Simplification of these RoO is proposed by basing eligibility criteria upon the
value added in the preferred country, so that the origin of raw material and other inputs ceases to be
an issue. This study has therefore assessed the impact of these proposed reforms on the trade n
fishery products. This Report describes the work undertaken, the results in relation to some of the
cases studied, and provides a synthesis of the findings with conclusions and recommendations in
relation to Commission Proposals.
The study was commissioned by the Directorate General of Fisheries of the European Commission
under a framework contract “for performing evaluations, impact analyses and monitoring services in
the context of fisheries partnership agreements concluded between the Community and non-member
coastal states”, operated by the consortium comprising Oceanic Développement (France), and
MegaPesca Lda (Portugal). The Terms of Reference for the study are shown in Annex 1.
This study has been undertaken by a team comprising Team Leader / Fisheries Economist, Fisheries
Resource Specialist and a Fish Processing Specialist. In order to complete this study Members of the
Evaluation Team have held meetings with Commission staff, as well as numerous detailed
discussions interviews with fishery sector stakeholders in Seychelles, Ecuador, Bangladesh, Kenya,
Indonesia and Namibia as well as within the EU. The study commenced on the 25th April 2007.
Objective
The primary purpose of the study was to assess the impact that the proposed changes to the Rules of
Origin for fishery products will have upon the seafood sector. This was evaluated from an economic
perspective, but also taking into account social and environmental aspects, especially in the
beneficiary developing countries
Approach and methodology
Central to the approach adopted has been a series of six case studies covering a representative
spread of seafood products, beneficiary countries and preference regimes:
Canned tuna: Seychelles (ACP) and Ecuador (GSP+)
Tuna loins: Kenya (ACP)
Frozen hake fillet (whitefish): Namibia (ACP)
Processed shrimp: Bangladesh (EBA) and Indonesia (GSP)
The methodologies applied were variously field enquiry in the targeted countries, use of computer
modelling to assess production costs, and a questionnaire survey of key EU stakeholders. The central
case investigated was the proposal that value added should be defined as all inputs other than raw
material costs, and that these should account for at least 50% to 60% of the ex-works price of the
product depending upon the preference regime on question
Key findings
The study started by assessing the value of preference to the beneficiary countries and other
stakeholders concerned. This was found to be more a function of the industry segment (eg species
group) concerned than either the preference regime or the country involved. Even so preference
clearly did have value, and this ranged from the critical (canned tuna) to the relatively minor
(processed shrimp). Set against this context, the study concluded that the proposed new value added
based RoO would have the following implications
Fisheries Partnership Agreement FPA 2006/20 FPA 03/RoO/07
Final Report - page 2
The proposed value added rule
• The new value added rule cannot be applied successfully to most fisheries products.
This is because the proposed value added thresholds of 50-60% mostly cannot be met. As
the table below shows, this is true for the sample of products assessed through the case
studies, where all but one product (hake fillet in retail packs) failed to meet the threshold
Summary of value added for the target products in selected countries
Stage Tuna Whitefish Shrimp
Seychelles Ecuador Kenya Namibia Bangladesh Indonesia
Processing 48%-50% 44%-47% 32% 65% 37-38%% 27%-37%
• It then seems clear that there is a generic problem with the added value criteria when applied
to seafood as defined by the proposed new RoO. The reason for this is high raw material
costs, exacerbated by the effect of extracting usable meat.
• Failure to reach the threshold is particularly prevalent for the type of labour intensive primary
processing most suited to developing nations – exactly the countries this legislation is
intended to benefit.
• Another problem for the value added rule is the radically different outcomes for different
species groups, with a high impact on tuna canning but minimal impact on shrimp producers.
This obviously undermines the ambition to devise a “one-size-fits-all” system that is coherently
applicable across the fisheries sector.
• The high proportion of costs attributable to raw material also leads to excessive sensitivity of
value added to changes in raw material costs, themselves very variable and subject to
changes in exchange rates. This means that value added is subject to rapid change that is
beyond producer’s control.
• The value added thresholds that could be achieved reliably under the specified conditions
were actually closer to 25%-30%, some 25-35 percentage points below the thresholds set
• An alterative scenario was also investigated - one where all inputs, not just raw materials
come under origination scrutiny. This means that cans, additives and packaging etc .would
need to pass the origination test. In this case the levels of added value achievable by seafood
processors could reduce to 15%-25%.
Unsurprisingly, then, most parties canvassed – in both developing countries and in the Member States
– believed that the proposed RoO change as currently formulated was unworkable for seafood, and
that for it to be feasible, thresholds would have to be greatly lowered. For the alternative scenario (all
inputs tested for origination), the threshold would obviously have to be even lower with the risk that
this might not be high enough to deter the abuse of “product laundering” by non-preferred countries to
avoid duty. Given these difficulties alternative approaches were explored, as follows:
• Maintaining the status quo: was the preferred option by most stakeholders canvassed, with
the single exception of the proposed changes to the vessel crewing rule, to which no one
seemingly objected. This option would also have the powerful advantage of being a known
quantity with which the industry is familiar and knows how to operate
• Change of HS code heading (Tariff jump) is a possible alternative criteria to value addition.
However, this too suffers from a fundamental problem because of highly inconsistent coding of
seafood products. As a result, the HS coding system tends not to reflect levels of possessing
realistically, and so is of little use as a practical measure for value addition.
• “Specific processing” and the definition of manufacture is another alternative criteria. This is
again problematic for seafood as again there is a mismatch between definitions of
Fisheries Partnership Agreement FPA 2006/20 FPA 03/RoO/07
Final Report - page 3
manufacture that specify “sufficient transformation” and the realties of seafood processing. In
particular filleting (which actually encompasses much of the work involved) is not deemed to
be manufacturing whilst subsequent minor steps (cooking) are.
There were a number of other important issues raised by the study alongside the core concern of the
impact of value added based RoO. These were
• The Tolerances Rule: Processors find tolerances difficult to use and this difficulty could
increase under the proposed new RoO. There is a question as to whether this represents a
renewed flexibility or a constraining “criteria” and this needs to be resolved. The reasons why
processors rarely use tolerances include a lack of understanding of the rules, practical and
administrative challenges in actually using them, and the concomitant risk in failing to use
them correctly and so losing preference privileges.
• Development and environmental implications of value added RoO. If the value added rule
is adapted so that it can be applied to seafood effectively, then there are a number of
additional implications for developing country beneficiaries as well as EU high seas fleets.
These include:
o Raw material supplies would be likely to be sourced more widely with price the
governing factor. This would discriminate against the EU fleet which is bound by access
agreements to fish responsibly. It would favour those vessel operators who cut the most
corners – i.e. those who pay least to their crew and tend to adopt IUU fishing practices.
This risks further damaging already hard pressed fish stocks and would mitigate against
more responsible fishing
o Traceability along the supply chain would reduce, particularly regarding the source of
the initial raw material. The quality of resource data would decline correspondingly as
would the reliability of SPS (food safety) information.
o FPAs would become less relevant if EU fleets reduce activity in preferred states’ EEZs.
There would be less justification for payments for fishing rights that are no longer taken
up. As these agreements support a mix of developmental and resource management
objectives, these too would suffer. The measures would lack coherence with the external
dimension of the Common Fisheries Policy.
o There would be problems for some third country domestic fleets unable to compete
with low cost imports, so stifling the potential development of national capacity in some
preferred countries
o Linked to this, there would also be a negative effect on other primary producers-small
scale fish and shrimp farmers, again from foreign competition. It seems then that the
processor’s gains would at least be partially offset by losses by primary producers.
Other Aspects of the reforms
There are some other important aspects that arose during the research, including serious concern
about the proposed RoO administration systems and reactions to the proposed change in rules on
vessel crewing.
European Seafood Importers liability: Importers are concerned about proposed reform of the RoO
administrative system and reassignment of responsibility for declaring origin from competent authority
to the exporter in the ACP/GSP state. In their view this will greatly increase the risk to EU commercial
operators who are liable for duties if preference is falsely claimed. Wider impacts of this could include
EU seafood importers becoming reluctant to deal with developing countries, or requiring large price
discounts to compensate for risk. This would then jeopardise developing country exports to the EU,
potentially undermining the gains sought by RoO reform.
Vessel crewing: Abandoning of the vessel crewing stipulation that formerly required 50%-75% of the
Fisheries Partnership Agreement FPA 2006/20 FPA 03/RoO/07
Final Report - page 4
crews of vessels to come from either the preferred state or an EU member state would remove a
constraint that was generally seen as benefiting no one. This was the view taken by stakeholders from
both the EU fleet and the developing countries. There is though a disadvantage to this proposal from a
development perspective. In some countries vessel crewing does present welcome employment
prospects (eg West Africa) where loss of an imperative to crew locally would (i) lead to potential job
losses and (ii) put pressure on national crews to accept less advantageous terms (or be replaced)
Overall Conclusions
There appears to be a misalignment with the system of RoO applied to Community trade in seafood
products. This poses the question as to how to develop the RoO system as it applies to seafood
holistically. Key outstanding issues that might usefully be addressed at this point include:
• The HS coding system bears little relationship to product differentiation from a practical
processing view point.
• Proposed definitions of manufacturing do not reflect the processing involved or the level of
value added.
• Originating status in aquaculture is currently determined by source of seed rather than that of
major cost inputs like feed – an anomalous situation that is at odds with reality
• There may be an advantage in rationalising processing into primary and secondary stages
in order to provide a coherent basis for establishing real value added
• Originating status for wild caught seafood. There is pressure from some sources to link
origination to “ownership” of the resource (i.e. the EEZ) rather than ownership of the means of
exploiting it (i.e. the fleet). This approach would find little support amongst EU fleet operators.
• Tolerances are seen by stakeholders as being too cumbersome, too complicated and too
risky to use, and so are forgone by most producers who prefer to use derogations
If value added thresholds were to be set a great deal lower to allow the system to work there would be
(i) a risk of allowing product laundering by non-preferred countries and (ii) a number of other problems
likely to arise. Not least of these are the following:
• The EU high seas fleet would lose markets and may decline
• Local fleets in some developing regions would face similar problems
• The aquaculture industry would also face lower demand and lower prices.
• IUU fishing activity could increase should the EU fleet withdraw
• FPAs would become irrelevant if the EU fleet begins to withdraw from these areas.
• A reduction in development and conservation initiatives supported by FPAs would result.
• The change itself could add to complexity for users who must adapt to the new system
These potential developmental and environmental disadvantages raise questions regarding the
advantages that the proposed new RoO might bring to the seafood sector. The answer seems to be
that although the value added rule might seem to be an elegant and logical solution, it does not stand
the test of practical worth in the fisheries and aquaculture arenas. This reflects a conclusion already
reached by most of the sector’s practitioners – that the proposed new RoO are unlikely to work as
anticipated for seafood, and that retaining the existing arrangement would be preferable.
A series of recommendations are made in the light of these findings.
• Set lower value-added thresholds for the fisheries sector products of HS 03 and HS1604
chapters at levels closer to 25-30% than 50-60% (or 10%-25% if all inputs need to be
originating).
• Refine the definition of manufacture to rationalise the classification of manufactures within
the fisheries sector, especially within the 03 HS Chapter (Alternatives to value added such as
“tariff jump” or “sufficient transformation” have been considered but are not seen as practical
Fisheries Partnership Agreement FPA 2006/20 FPA 03/RoO/07
Final Report - page 5
options).
• Address EU Importers concerns with the new RoO administrative arrangements that
transfer responsibility to exporters as this could lead to a reduction in trade between
preferred suppliers and the EU.
• Clarify the tolerance rule in the new RoO and rationalise the tolerance and derogation
regimes.
If these reforms prove to be impractical, then retaining the existing RoO system or a modified
variation of it appears to be the best option as departures from this appear to generate substantially
more disadvantages than advantages for the seafood sector.
Either way an educational/awareness programme will be essential given the confusion concerning
the current RoO system within the industry, and the likelihood that this will increase if there are
changes. |
