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

Final <strong>Report</strong>
RoO Derogation under the PACP-IEPA
scenario, PNG’s estimated exports would result in a relative diversion of trade volumes from third
countries. However, under both growth scenarios, the overall medium-term impacts of increased
PNG exports will be relatively minimal.
Nonetheless, which players could be crowded out of extra-EU import markets for canned tuna by
PNG in 2016 Potential trade diversion for third countries is identified by using historical trends of
market interaction with PNG. Table 6.17 details the volume of third country canned tuna exports to
the EU by destination market. The market share data uses annual averages for 2006-2010 so as to
limit anomalies occurring in particular years, markets and/or by particular third countries. The
qualitative estimate of which third countries may be impacted combines this market share data with
the assumptions around raw material diversion detailed above.
Two sets of types of companies in third countries have been identified as potentially being impacted:
1. Asia-Pacific: non-branded processors targeting similar markets as PNG (e.g. Germany, the UK
and the Netherlands) that are also reliant on the WCPO for raw material. 341 These could
include individual processing firms in the Philippines, Vietnam, China and smaller players in
Thailand. As detailed in Table 6.17, the German market is the main site of interaction
between these third countries and PNG. Exports from Thailand to Germany contracted by
6.4 times between 2006 and 2010 342 and by 27% for the Philippines. Conversely, PNG’s
exports to Germany increased by 68% over this period, while Vietnam’s grew by only 16%.
This indicates that PNG might capture an even greater share of this market by 2016.
2. Others: specialised non-branded processors in a weak tuna supply position (e.g. poor
location, without vertically-integrated fleets,) and without ownership by EU firms (i.e. that
are not tied-in to EU markets through EU firms who have an interest in the commercial
survival of their overseas cannery investments). If PNG-based processors increase their
penetration of the French market for example (see above), this could impact some
traditional suppliers of the French market (see Table 6.17). This might include a slight drop in
market share of the single cannery in Madagascar (whose EU market share declined by 61%
over the last five years, 2006-2010) and, possibly, one of the canneries in Côte d’Ivoire (EU
343
market share for this country declined by 18% between 2006 and 2010).
With the recent MSC certification of the PNA free school purse seine skipjack fishery, there will likely
be a shift in PNG market share of the UK market, at least for major supermarkets’ private label
product due to commitments to source pole and line or FAD-free product. In addition, Germany will
likely continue as a principal market, at least for non-MSC product.
341 It is too simplistic to assume that raw material diversion alone would result in a direct reduction in Asia-
Pacific export volumes to the EU market because companies would presumably adjust their export strategy to
make sure they continued to supply their highest value markets such as in the EU.
342 This sharp decline is partly because 2006 was the record high for Thailand exports to the EU. Thai exports
have since declined as Thai processors have engaged in a strategy of market diversification (as noted earlier).
343 Compare the trends in Tables 6.6 and 6.17.
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