Improving trade in processed agricultural goods

The European Commission welcomes today’s European Parliament vote on its proposal to update the trade regime for processed agricultural products (PAPs).

PAPs are goods obtained through the processing of basic agricultural products, such as confectionaries, chocolates, pastas, bakeries, biscuits, spirits, soft drinks and so on.

The EU is the world’s biggest exporter of processed agricultural products, with total value of €41.7bn in exports.

The new regulation will facilitate the trade of PAPS between the EU and non-EU countries. Its aim is to update the legal framework for the implementation of EU preferential trade agreements concluded with non-EU countries. It also provides for export refunds to be granted to some PAPs when market disturbances occur, for example a collapse in world agricultural product prices as a result of an abundant harvest.

European Commission vice-president Antonio Tajani, Commissioner for Industry and Entrepreneurship said: “The food industry is the EU’s biggest manufacturing sector in terms of employment and added value. Its trade regime is particularly important for the sector’s growth and the relevant rules needed to be simplified. We therefore count on the forthcoming agreement of the Council for the final adoption of the Regulation.”

The new regulation updates the legal framework for the implementation of bilateral trade deals, in particular as regards preferential trade conditions the EU concedes to trade partner countries in the form of reduced or zero import duties and tariff quotas, in exchange for better market access conditions for EU products.

It also updates the legal framework for granting refunds for the export of certain foodstuffs, creating a safety net which can be triggered in cases of market disturbances such as strong fluctuations in world agricultural market prices due to climate conditions or to speculation.

As a consequence, the regulation is expected to contribute to the efficient achievement of the Common Agricultural Policy objectives and in particular to stabilise markets, secure availability of supplies and provide consumers with food at reasonable prices.

Next steps

The council is expected to approve the proposal on 14 April. Following the adoption of this basic legal text, the Commission will shortly adopt the necessary delegated and implementing acts to regulate in detail the various issues included in the regulation (such as import licenses, import duties, tariff quotas, export refunds, refund certificates and so on).

Background

These laws are of particular importance for the food manufacturing industry, which is by far the main user of EU-produced basic agricultural products such as sugar, milk, cereals and eggs.

The food and beverages industry is the EU’s largest manufacturing sector in terms of value added and jobs.

Some 289 000 companies, most of them of small or medium-sized, are involved. Altogether they generate an annual turnover in excess of €1tn and employ 4.6 million people. With imports worth €11.8bn, the EU’s trade balance in those products amounted to €30bn in 2012. This corresponds to an average yearly increase of 13.2 per cent since 2008.

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