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Caobisco “concerned” over EU-Japan trade deal

European confectionery association Caobisco has voiced its concerns over a new EU trade deal with Japan, with fears the rules of origin would represent a trade barrier to exports from the EU.

Japan, Caobisco says, represents important market access opportunities for the sector as well as the EU’s economy. However, it notes that the agreed specific preferential rules of origin for confectionery, chocolate and fine bakery wares based on weight criteria of ingredients instead of the conventional value criteria, would represent a trade barrier to exports from the EU, not only for small- and medium-sized businesses.

It goes on to add that with the end of sugar production quotas, the association welcomes the increase of EU sugar production and has always indicated its preference to source sugar in the EU.

However, the sugar sold to Caobisco manufacturers is in a significant number of cases not accompanied by a supplier declaration and the association’s exporters are unable to prove the volume of non-originating sugar to meet the origin rules.

“Furthermore, changing the origin rules would have significant administrative costs for SMEs,” Caobisco explains.

Out of an annual production of 12 million tonnes, around two million tonnes of Caobisco’s produce is exported outside the EU (17%).

The group also states that manufacturers would be unable to prove the weight of non-originating sugar in their final product, and therefore not benefit from important tariff concessions made.

Caobisco says it has in recent years warned the European Commission of the consequences of negotiating weight-based origin rules for its products, but without any success.

“Once again, we have to note that the interests of EU agricultural production have been prioritised over the benefits of the high-value added food industry,” it adds. “Without a change to the current situation, Caobisco questions if a ‘no deal’ would not be more beneficial for the sector than a bad deal.”

Sugar is the main ingredient in Caobisco products. Current rules of origin in FTAs set a value limit on non-EU sugar in its products of 30%. The rule, the association says, is respected by all manufacturers, is internationally recognised and should be maintained in all future EU FTAs.

In recent trade agreements, for example, Singapore and Vietnam, the EU has switched to weight based rules of origin. The intention is to limit non-originating material, sugar in this case, based on a weight percentage of the final product.

“This represents a huge obstacle for our exports, threatens growth and jobs in our industry and undermines the creation of value-added in the EU,” it notes.

“Weight-based rules of origin will lead to drastic barriers to our exports. This situation not only lead to more administrative burden to operators having to comply with different rules in FTAs but also restricts the use of non-EU sugar which is and will continue to be sourced by sugar suppliers in the future in order to respond to the needs on the market.”

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