Archive for January 8th, 2011

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Deep and Comprehensive Free Trade Agreement – Moving goalposts?

January 8, 2011

Well dear readers, as you are undoubtedly aware from previous posts, it is anticipated that the DCFTA between Ukraine and the EU will be signed by both parties at some point this year.

The major sticking point at present is agriculture as I have previously written (do feel free to use the search facility).

One of the biggest bones of contention within the EU itself is indeed agriculture, as any UK politician and bureaucrat will tell you.

This area, particularly regarding the Common Agricultural Policy or CAP as it is known, is still bitterly opposed or fought for tooth and nail by various member states within the EU, so it should come as no surprise that a nation with such huge agricultural potential, notwithstanding existing agricultural exports such as Ukraine, will be seeking to insure the stability of its existing profits, let alone seeking to get favourable conditions for investment in its agriculture sector.

However, any eventual negotiated agreement is of course going to be in line with the existing conditions.

In 2014 however, there is likely to be a major change in the EU CAP policy as you can see……here:

http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/1527&format=HTML&aged=0&language=EN&guiLanguage=en

In effect it seems very likely that CAP will move away from production (or subsidised lack of it) towards environmental rewards.  One wonders who that will affect the likes of GMO products many of which are hugely unpopular amongst EU nations with some exceptions like Spain.  Any move further away from GMO is very likely to upset the USA.

Indeed Annex A to the link would be a drastic move away from the existing CAP theology and move towards “greener” agriculture just as Ukraine is trying to upgrade the agricultural industry here to that which would mirror the EU producers.

Of course some upgrades such as storage facilities and silos, harvesters and bailers, would remain high on the inward investment list for Ukraine……or at least remain affordable when the protective tariffs are removed from EU agricultural produce entering Ukraine and that GDP revenue is lost from domestic investment in the sector.

However, with the goalposts quite obviously being moved within the EU relating to its existing policy towards the agriculture sector in 2014, as yet to an unknown position, one has to hope that the Ukrainian negotiators are at the very least aware the game is likely to change within a few years of signing on the dotted line……if not directly for them then certainly for their competitors in the European market.

Isn’t life interesting?

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