The Brussels Development Briefing n. 58 on “Africa’s Agriculture Trade in a changing environment” organised by CTA, the European Commission/EuropeAid, the ACP Secretariat, IFPRI, Concord and BMZ/GIZ was held on Wednesday 23 October 2019 (9h00-13h00) at Hotel Sofitel Brussels Europe, Place Jourdan 1, 1040 Brussels. The briefing brought various perspectives and experiences around the new trends and opportunities in intra-Africa trade in the context of free trade agreements and regional integration. It also showed Africa trade within the broader global trade picture and with the EU as one of the main trade partners. Experts presented trends and prospects of regional trade in Africa in the light of new policy developments as well as Africa’s recent performance in different markets. It also featured successes and innovative models in regional trade across regions in Africa and lessons learned for upscaling and expanding regional trade.

1. IMPACT OFTHE CAP AND LESSONS LEARNED
FOR AFRICA’S AGRICULTURAL REGIONAL
TRADE
Presentation to the Brussels Policy Briefing No. 57
” Africa’s AgricultureTrade in a changing environment”
Organisers: CTA, ACP Secretariat, European
Commission/Devco, Concord, IFPRI, BMZ/GIZ
Brussels, 23 October 2019
Professor Alan Matthews
Trinity College Dublin, Ireland
alan.matthews@tcd.ie

2. Integration of agricultural markets in the EU
■ Some early history
– Food security and balance of payments problems in 1950s
led to strong emphasis on national self-sufficiency policies
supported by tariffs, quotas and administered price support
■ Treaty of Rome 1958
– Established goal of a common market, i.e. a customs union
underpinned by commitment to free movement of goods,
services, capital and labour plus common policies (e.g.
competition, state aids, agriculture)

3. Integration of agricultural markets in the EU
■ Liberalisation of intra-regional trade took place in the context
of a Common Agricultural Policy
■ Principles
– Market unity
– Community preference
– Financial solidarity
■ Regulation 19/62 initiated step-by-step introduction of a
common market organisation for cereals
– Customs union fully in place in 1968, eighteen months
ahead of schedule

4. Prices for certain agricultural products in the EU
compared to world price levels, 1967/68
Product EU common price
UC/100 kg
World market price
UC/100 kg
EU price as % of world
market price
Soft wheat 10.7 5.8 185
Hard wheat 16.1 8.1 200
Husked rice 18.0 15.3 117
Barley 9.1 5.7 160
Maize 9.0 5.6 160
White sugar 22.3 5.1 438
Beef 68.0 38.8 175
Pig meat 56.7 38.6 147
Poultry meat 72.3 55.0 131
Eggs 51.1 38.7 132
Butter 187.4 47.2 397
Olive oil 115.6 69.8 166
Oil seeds 20.3 10.1 200
Source: Fennell (1997). UC is unit of account.

5. Income support and stability were main objectives of
the classicalCAP
5
Guaranteed
minimum price
Peu
Pw
Variable import
levies
Variable export
refunds
World market World market
EU market
Price

6. Tackling non-tariff barriers
■ 1988 Cecchini Report
– Found over 200 non-tariff barriers in just ten food sectors
■ Initial approach was to harmonise standards using EU
legislation
■ European Court of Justice Cassis de Dijon ruling
– Established principle of mutual recognition which led to
‘new approach’ to harmonisation
■ Introduction of Single Market 1 January 1993
– Facilitated by agreement to use Qualified MajorityVoting

7. Main lessons from the EU experience
■ Trade integration requires high level of domestic policy integration
backed up by trust (judicial enforcement – Brexit)
■ Regional integration sets limits on the exercise of domestic
agricultural policy
– Solution is either to limit domestic agricultural policy toWTO
Green Box measures or to operate agricultural policy at the supra-
national level
■ Supra-national agricultural policy comes with its own set of policy
issues with which CAP still struggles
– Integrating agricultural policy does not require making the same
mistakes as the CAP
– Common policy vs subsidiarity; distribution of financing

8. Reading
Matthews, A. “Food security
as a driver of integration in
Europe”, in Brennan, L. and
Murray, P. Drivers of
Integration and Regionalism in
Europe and Asia, London and
NewYork, Routledge, 2015