World food trade in 2019: Small wins gained but major uncertainty dominates


04 Dec 2018 --- From the still-to-be-confirmed EU and UK Brexit deal, so-called trade war truce between the US and China and the oil protests in France, controversial trade issues remain in the spotlight as 2018 draws to a close. And as we head into a new year, trade issues will remain high on the agenda. The EU and Japan have upgraded their strategic partnership with both countries signing a major trade agreement that will make it easier for European companies to export to Japan. This includes eliminating 90 percent of tariffs on more than 90 percent of the EU’s exports to Japan and signals the “dawn of a new era” between the two trading blocs. The proposed agreement is being hailed as a major deal that will ramp up trade relations and comes as turbulent trade issues in other parts of the world continue to dominate.

The EU and Japan have agreed to upgrade their partnership against a background of increasing international tensions and protectionism. EU companies export more than €58 billion (US$66 billion) worth of goods and €28 billion (US$31.8 billion) in services to Japan a year, but the trade agreement will likely boost this even further by removing remaining barriers to trade. 

Eliminating the majority of tariffs on the majority of the EU’s exports to Japan is expected to save EU exporters about €1 billion (US$1.1 billion) in customs duties a year. In addition, Japan will recognize the special status of more than 200 European agricultural products from specific regions, known as “Geographical Indications.” Examples include Roquefort, Aceto Balsamico di Modena, Prosecco, Jambon d'Ardenne, Tiroler Speck, Polska Wódka, Queso Manchego, Lübecker Marzipan and Irish Whiskey. Measures will also be taken to lower non-tariff barriers, for example, by relying on international standards rather than specific Japanese requirements.

The planned strategic partnership is also expected to improve cooperation on common challenges such as security and the environment. 

“The EU-Japan Economic Partnership Agreement sends a timely signal in support of open, fair, values- and rules-based trade at a time of increasing protectionism and an erratic trade policy by US President Donald Trump,” says Lead MEP Pedro Silva Pereira, a Portuguese member of the S&D group.

“This agreement also represents an opportunity for the EU in the Asia-Pacific, especially since the US withdrawal from the Trans-Pacific Partnership (TPP) regional free trade agreement, and helps promote EU values and high standards in the region.”

The MEP says that the agreement is about much more than just stimulating trade: “This agreement will foster not only closer bilateral economic ties, but also concrete cooperation on sustainable development like the fight against climate change. The agreement can, in addition, enhance coordination on multilateral issues with Japan and help shape rules for the global economy in line with our high standards and shared values of respect for human rights, democracy and the rules of law.”

The now-defunct TPP – the proposed trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the US – was signed in February 2016 but was not ratified as required. After the US withdrew its signature [when], the agreement could not enter into force. 

A new trade agreement called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which incorporates most of the provisions of the TPP and which is to enter into force on 30 December 2018, was negotiated by the remaining nations.

This partnership comes as the US and China claim a trade war truce as Trump says relations with Chinese President Xi Jinping have “taken a big leap forward.” The two leaders have agreed not to increase tariffs for 90 days as they negotiate a way forward on controversial trade issues that have been a sticking point and concern for several sectors of the food industry for months. 

Trump claims China will “reduce and remove” the 40 percent tariffs it places on US cars imported into the country. This is unconfirmed by China. However, it is being widely reported that the temporary truce on trade has been called as the leaders met during the G20 summit. 

Meanwhile, weeks of violent protests in France have culminated in the French government saying it will suspend a fuel tax rise in a bid to seek compromise with the so-called “yellow vest” protesters. Protests across France have escalated in recent days, reflecting much more widespread anger at the government. 

The EU-Japan proposed agreement, which still needs to be voted on during the December plenary and approved by the European Council before entering into force – also comes at a pivotal time considering Brexit as politicians, members of the public and the industry wait with baited breath for the outcome of the UK Parliamentary vote scheduled for December 11. 

The Withdrawal Agreement – which has the full backing of Europe – will go before UK MPs next week, make or break time for the Brexit deal that would avoid a no-deal scenario. 

Many within the food industry would like to see a deal passed in order to get clarity on key trade issues as the UK is set to leave Europe next March. However, under the proposed Withdrawal Agreement, there is a transition period that would last until December 2020 which could be extended further. 

What’s next?
All eyes will be firmly fixed on UK Parliament next Wednesday as much of what happens next boils down to whether British Prime Minister Theresa May’s deal gets the backing on MPs, something the food industry, at large, wants to see happen. The so-called US-China truce may or may not last and it remains to be seen how exactly the suspension of France’s fuel price hike will impact protests. However, the EU-Japan agreement is an example of how positive trade relations could be central to keeping the global economy bubbling in 2019 and beyond. 

By Gaynor Selby

To contact our editorial team please email us at

Related Articles

Food Ingredients News

“Confident in UK chocolate future”: Barry Callebaut acquires UK-based Burton’s Biscuit Company’s chocolate manufacturing assets

10 Dec 2018 --- Barry Callebaut has completed the transaction to acquire Burton’s Biscuit Company’s chocolate manufacturing assets in the UK. It comes after the cocoa giant signed an agreement with the UK’s second biggest biscuit manufacturer, for the long-term supply of more than 12,000 tons of chocolate and compound per year in September. The deal comes just months before the UK is set to leave the EU and Barry Callebaut has highlighted Britain as a significant growth region for the company.

Packaging & Technology News

Clever Cup: Costa and Barclaycard launch UK’s first reusable contactless payment coffee cup

10 Dec 2018 --- Costa Coffee and Barclaycard have collaborated to launch the UK’s first reusable coffee-cup with integrated contactless payment technology. Powered by Barclaycard’s bPay technology, Costa Coffee’s Clever Cup allows users to make purchases with the cup, top up their in-store credit balance and track payments online or via a dedicated app on both iPhone and Android devices. Launched last month in Costa Coffee stores across the UK, this reusable innovation is expected to decrease the volume of discarded coffee cups.

Food Ingredients News

UK food and drink exports reach £16.4bn as Brexit looms, says FDF report

07 Dec 2018 --- UK food and drink exports have increased by 1.8 percent to £16.4bn (US$21 billion) from January to September, compared to the same period in 2017, with exports of branded goods edging up. The food and drink trade deficit has narrowed by 1.3 percent as a result, now standing at -£18.0 billion (-US$23 billion), according to the latest analysis from the Food and Drink Federation (FDF). The news of the export success comes just ahead of the all-important parliamentary vote on the UK’s Withdrawal Agreement from the EU, which is scheduled to take place next Tuesday (December 11). The Withdrawal Agreement – which has the full backing of Europe – will go before UK MPs next week, make or break time for the Brexit deal that would avoid a no-deal scenario.

Food Ingredients News

In Living Coral? Pantone tips pink-tinted hue for 2019 as Instagrammable food colors trend

07 Dec 2018 --- Pantone has named “Living Coral,” a pink-tinted hue as its color of the year for 2019, inspiring colors suppliers and packaging manufacturers to think about what the food & beverage implications may be. The shade, part orange, part pink, is a warm and welcoming one that adds life and playfulness, according to Jeffrey Beers, founder and CEO of his eponymous design firm. This year’s color was Ultra Violet, a deep purple hue. The news of the choice of coral has been met with interest from food colors suppliers, who shared their views with FoodIngredientsFirst.

Food Ingredients News

Withstanding climate change: Food system organizations need strengthening, says US study

07 Dec 2018 --- US researchers are highlighting how organizations involved in the food system need to be better prepared to respond to the disasters caused by extreme weather events as well as acute disruptions caused by civil unrest and cyber attacks. Businesses and organizations involved in growing, distributing and supplying food must be able to withstand and rebound from these types of risks in a bid to improve resilience. This latest study closely follows an in-depth report last week from some of the world’s leading science academies warning that the global food system is “broken” and “collective action” is urgently needed to avert a climate change catastrophe.

More Articles