EU seafood processors need tariff-free imports to remain viable, industry leaders insist
Without access to raw materials that are free of import duties, Europe’s seafood processing industry would not be able to provide sufficient products to meet the rising demand of the domestic market, and what it would produce could prove too expensive for the region’s consumers, the sector has warned.
With the European Union Council of Ministers about to approve the new regulation setting autonomous tariff quotas (ATQs) for certain fishery products for the years 2021-2023, the EU Fish Processors and Traders Association (AIPCE) and the European Federation of National Organizations of Importers and Exporters of Fish (CEP) have cautioned that while Europe’s seafood processors prefer to buy local raw materials, the region does not produce sufficient seafood to meet consumer demand, meaning that raw materials need to be sourced from third-countries to supplement the shortfall.
AIPCE President Guus Pastoor told SeafoodSource that these additional supplies are needed to ensure the E.U.’s processing factories remain economically viable. In 2017, the sector comprised about 3,500 firms, provided some 130,000 jobs, and collectively achieved a turnover of EUR 32 billion (USD 37.5 billion).
“We want to process products close to the consumer markets, if this is possible. So, the whole discussion about ATQs is not about importing consumer products, it is about access to materials for further processing in the E.U., adding value, generating employment. Without trade instruments, more products would be processed in third-countries and imported as finished products,” Pastoor said.
Ahead of the ATQ decision, the European Council has come under pressure from fishing bodies to reduce the amount of duty-free fish imported into the bloc, with the insistence that the increasingly larger volumes arriving in the market from overseas are having a detrimental impact on the fleet, particularly in terms of prices and employment. The E.U. fishermen’s representative body Europêche and the European Association of Fish Producers Organisations (EAPO) have calculated that an additional 60,000 metric tons (MT) of imported fish could benefit from the latest ATQ regulation annually, with the E.U. expected to grant zero duty access to more than 20 species representing 810,000 MT of products.
While Europêche and EAPO accept that some ATQs are necessary to ensure access to certain fisheries, they also claim that in certain other cases the system is being abused and creating instability in the market.
However, Pastoor said when the ATQ regulation is up for renewal, AIPCE-CEP generates a list of market needs. This starts with the present regulation, the utilization of the ATQs, and the market forecast.
“Some ATQs are depleted in no time, like tuna loins and flatfish. Others are not fully utilized. This can be because of lack of supply, lack of demand, or other factors,” he said. “If our analyses show that certain ATQs are no longer used, they can be removed. If, on the other hand, new needs emerge, we will ask for those new species to be introduced."
The list is ever-changing, but certain demands are predictable and expected to increaase over time.
“It is a dynamic list, but demand for most of the larger ATQs like Alaska pollock or cod will mainly go up, due to market growth and lack of resources in the E.U," Pastoor said.
The E.U. actually has more than 20 different regulations in place besides the ATQ regulation, with different schemes of preferences, Pastoor said, adding that regulations also vary from year to year, as they gradually eliminate duties over a period of years. If these trade instruments were significantly reduced or eliminated, Pastoor said the costs of materials for processing would in general go up, as import duties would apply, and this would push up consumer prices. At the same time, if the products are available in third-countries with lower cost structures, then imports could become more attractive.
“Canned tuna, for example, can be imported from Asia, putting pressure on processors in the E.U. We already see large quantities come into the market, and if processing capacity and logistics are available, this can happen in the short term," he said.
Last year, the E.U.’s processing industry sourced close to 9.5 million MT of live weight equivalent fish from third-countries, with whitefish species like Alaska pollock, cod, and hake accounting for 2.8 million MT, tuna 1.4 million MT, and shrimp 880,000 MT.
Competition for these products from other important markets like North America and Asia is increasing in line with the rising global demand for seafood, Pastoor said.
“Where countries now export many products, they will become importers of more species,” he said. “In the end, it will come down to catch levels, purchasing power, consumer preferences, and legislation concerning seafood.”
An expansion of the European aquaculture sector can help alleviate some of the need for greater supply, but won’t cover the entire gap, Pastoor said.
“Aquaculture will provide for the gap between demand and supply,” he said. “In the E.U., aquaculture has not grown in the same pace as it did in many other parts of the world. There is potential for expansion, but this is limited because of lack of suitable areas, climate, problems with nature conservation policies, and other red tape," he said. "Also, for aquaculture products, the E.U. will remain to be a net importer.”
Photo courtesy of Renew Europe