Economic Partnerships Brussels, 24 February 2012
European Commission publishes study on global sourcing in the Pacific
Today the European Commission released an external consultants’ study on the derogation from standard Rules of Origin granted to Pacific countries in the framework of the EU – Pacific interim EPA. The study was commissioned by the Commission to independent experts. Work began in July 2011 with a stakeholder meeting, and was concluded in December 2011.
The European Commission welcomes the study results, but the study itself does not necessarily reflect the European Commission's opinion.
What is "global sourcing"?
As part of the EU - Pacific agreement (initialled by Papua New Guinea (PNG) and Fiji in 2007, then signed in 2009, but ratified and applied by PNG only), a special derogation to the standard Rules of Origin (RoO) for processed fish was negotiated. This derogation, often referred to as ‘global sourcing’, permits Pacific ACP countries (PACPs) to source raw material from any vessel regardless of flag or where it was caught, provided it has been ‘substantially transformed’ by a PACP-based processing facility into canned tuna or frozen cooked loins.
This was a one-off and specific exception offered exclusively to PACPs because of their geographical isolation and distance from the EU market, in addition to limited fishing capacity of PACP fishing fleets which resulted in a lack of RoO compliant fish under the previous RoO, reduced processing capability due to physical and economic factors as well as a low identified risk of destabilising the EU market.
What did the study look into?
The study analysed the following issues:
- Development effects on PNG economy – long-term income and employment generation;
- Effective conservation and sustainable management of fishing resources (including compliance with sanitary and phytosanitary (SPS) regulations and support for combating illegal, unregulated and unreported (IUU) fishing in the Western and Central Pacific Ocean (WCPO)); and
- Impacts on the EU canned tuna market and EU fishing and canned tuna processing industry.
What did the study conclude?
The study concluded that, by and large:
- Global sourcing has a positive developmental effect on PNG, while at the same time
- It has limited or no adverse effect on EU industry, in particular on the tuna canning sector;
- There is a mixed picture in terms of possible depletion of fisheries' stocks in the Pacific region, and environmental protection;
- Challenges remains in the field of labour and women's rights in PNG.
What is the European Commission doing about this?
On 24 February 2012, at the second EU – Pacific interim EPA Trade Committee in Port Moresby, Papua New Guinea, the European Commission officially presented the final version of the study to PNG authorities and discussed the results.
The Commission welcomed the conclusion that the interim EPA in general, and global sourcing in particular, has proved to be beneficial to PNG development. It also took note of the conclusion that the impact on European industry is extremely limited.
During the Committee meeting, the Commission held formal consultations in which the PNG authorities outlined:
- the steps already taken and their plans to further strengthen the sustainable management of fish stocks;
- the review of their domestic labour legislation which is aimed at bringing it fully into line with the 8 core ILO conventions;
- the measures already in place and further steps to improve environmental monitoring.
The Commission and PNG agreed to continue to monitor progress in these areas.