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Kennedy's Bakery Production Magazine | January 17, 2019

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Trade body Caobisco’s concerns over EU deal with Japan

Trade body Caobisco’s concerns over EU deal with Japan

Caobisco, the organisation representing the chocolate, biscuit and confectionery sector in Europe, has expressed concerns over a new EU trade deal with Japan.

According to the industry body, the free trade agreement concluded by European Commission, may impact negatively on small and medium-sized businesses (SME’s).

While Caobisco welcome the commercial potential of the deal with Japan, it claimed the agreed preferential rules of origin for confectionery, chocolate and fine bakery products based on weight criteria of ingredients instead of the conventional value criteria, would represent a trade barrier to exports from the EU.

The organisation said that from an annual production of 12 million tonnes of products, around 2 million tonnes is presently exported outside the EU. Caobisco-linked industries presently employ more than 320,000 people across Europe, which has created considerable benefit to its economy.

Caobisco added that the recent ending of sugar production quotas meant a welcome increase in EU sugar production, which it had indicated had been a desirable move.

However, it revealed that the sugar sold to Caobisco manufacturers is in a significant number of cases not accompanied by a supplier declaration and thus our 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. Manufacturers would be unable to prove the weight of non-originating sugar in their final product and thus not benefit from important tariff concessions made.

The trade body added that it had previously warned the European Commission at numerous occasions of the consequences of negotiating weight-based origin rules for its products, but without any success. It believed that the interests of EU agricultural production have been prioritised over the benefits of the high-value added food industry.

Consequently, Caobisco questioned whether a “no deal” scenario would not be more beneficial for the sector than a bad deal.