Report on the Implementation of the derogation to ... - Trade Websites

Final <strong>Report</strong>
RoO Derogation under the PACP-IEPA
does not appear to be realistic’. 335 In other words, these projections do not serve as evidence for
market destabilisation.
Growth scenario for extra-EU import volumes of tuna loins
For tuna loins, an increase is assumed in EU imports by 2016 to 159,000 mt from 104,400 mt in 2010
(i.e. a difference of 54,600 mt). This projection is based upon the relative increase in the seven-year
period 2004-2010 of 1.52.
336 We assume continued growth because EU-based producers, especially
in Spain, will continue to operate behind effective tariff protection for the foreseeable future since
the collapse of the Doha Round this year. 337 Whether or not Spanish canneries will continue to
convert their canning process to increasingly rely on the utilisation of loins is an open question, not
least as processing from large, whole round yellowfin within Spain is more profitable than processing
from loins (see Section 6.3.1).
Based upon projected PNG exports to the EU in 2016 of 29,200 mt, PNG could capture up to 15.4%
share of the extra-EU import market for tuna loins. Under this scenario, Ecuador’s 2010 market
share (Table 6.15) is more than double that of Papua New Guinea’s projected share in 2016. In short,
the derogation will not have a market destabilising effect. Moreover, given the assumption that the
EU market for loins will increase by 54,600 mt between 2010 and 2016 and that PNG’s projected
exports in 2016 are 29,200 mt, existing third country suppliers will still have room to grow. In light of
this, we do not consider further the trade diversionary effects of the derogation on third countries in
the extra-EU import market for tuna loins.
Potential trade diversion for third countries in the extra-EU canned tuna import market
PNG canned tuna exports to the EU were 15,867 mt in 2010. The 2016 projection of PNG exports
reaching 56,705mt entails an increased volume of around 40,000 mt. Given that there are very
limited projected increases in volumes under both of the growth scenarios for the extra-EU import
338
market for canned tuna, PNG’s projected increase in exports may mean that the derogation
contributes to a minor trade diversionary effect:
• Under the relative market stagnation scenario, the additional volume of PNG exports would
result in a decrease in the intra-EU import market available to third countries of around
339
7,000 mt.
• Under the mild market growth scenario, the additional volume of PNG exports would result
in an increase in market volume available to third countries of around 37,000 mt. 340
In other words, under the relative market stagnation scenario, PNG’s projected 2016 exports would
result in a minor absolute diversion of volume from third countries. Under the mild market growth
335 Oceanic Développement 2010: 120.
336 Based on data in Table 6.2.
337 However, this must of course be treated with caution. For example, Spanish industry may continue to
transfer elements of its operations to Latin America, the global economic slump may adversely affect tuna
consumption reducing the demand for loins, and so on.
338 According to the first growth scenario (i.e. relative market stagnation), the EU will import around 34,000 mt
more canned tuna in 2016 (404,400 mt) than it did in 2010 (370,847 mt). According to the second growth
scenario (i.e. mild market growth), the EU will import around 78,000 mt more canned tuna in 2016 (448,527
mt) than it did in 2010 (370,847 mt).
339 Based on extra-EU import volume in 2010 of 370,847 mt and in 2016 of around 404,400 mt results in an
estimated absolute market growth of 33,500 mt. Thus PNG increase of 40,800 mt = 7,300 mt decline in market
volumes available to others.
340 Same calculation as above but with a larger market in 2016 of 448,527 mt = an absolute increase from 2010 of 77,680
mt. Minus PNG’s increase of 40,800 mt = 36,880 mt increase available to other players.
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