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

Final <strong>Report</strong>
RoO Derogation under the PACP-IEPA
The Parties recognise that since the Lomé Convention was signed in 1976, Pacific States
have not been able to develop an adequate national fleet respecting the vessel
conditions of Article 5.2 of the present Protocol II [i.e. on ‘wholly obtained’ fish]. The
Parties also recognise the special circumstances of the Pacific States encompassing the
insufficient wholly-obtained fish to meet on-land demand, the very limited fishing
capacity of the Pacific States’ fishing fleet, the reduced processing capability due to
physical and economic factors, the low risk of destabilising the EU market due to large
inflows of fishery products from the Pacific States, the geographical isolation of the
Pacific States as well as the distance to the EU market. The Parties also share the final
goal of promoting further development in the Pacific States while promoting
sustainable fisheries and good fisheries governance. (Protocol II, Article 6.6(a).)
In other words, the negotiated text of the PACP-EU IEPA explicitly recognised that prior EU RoO had
limited the developmental potential of commercially significant trade preferences for processed fish
products due to ‘insufficient wholly-obtained fish’.
For the EU this was a one-off exception offered exclusively to PACPs because of their historical lack of
originating fish under Cotonou RoO. Global sourcing is ‘a specific relaxation’ for the PACP and ‘cannot be
taken as a precedent in other negotiations’ (DG Trade 2007a: 3; see also DG Trade, 2007b: 15). A letter
by Trade Commissioner Peter Mandelson to Cook Islands Minister of Foreign Affairs Wilkie Rasmussen
reiterates this position. In the letter, Mandelson noted that, in offering global sourcing fisheries RoO,
‘we did so specifically and only for the Pacific, in response to what you [the PACP] said was a decisive
issue’ (Mandelson 2008; see also, EUROTHON 2011a: 2-3).
Popularly referred to as ‘global sourcing’ this negotiated outcome of the PACP-EU Interim EPA is more
technically understood as an application of the Change in Tariff Classification (CTC) method. That is,
goods are deemed to be originating if they are transformed in a signatory PACP country from one
heading of the Harmonised System (HS) of tariff classification (in this case fresh and frozen fish under
Chapter 3, especially tuna) to another heading (in this case processed fish products, especially canned
tuna and tuna ‘loins’ for reprocessing as canned tuna under Chapter 16). 13 The text establishing the
‘global sourcing’ derogation is reproduced in full as follows:
6. (b) The Parties recognise the enormous importance of fisheries to the people of the
Pacific States and that the fish, for example tuna in the Western and Central Pacific
Ocean is the most important shared natural resource for long-term income and
employment generation for the Pacific States. This shared fisheries resource in the
waters of the Pacific States is subject to various management regimes at regional, subregional
and national levels, including the Vessel Day Scheme aiming at regional
sustainable tuna purse seine fisheries. These activities are subject to monitoring within
13 It is important to specify the type of tuna ‘loins’ under consideration here. Pre-cooked, vacuum-packed frozen
skipjack and yellowfin tuna loins are filed under Chapter 16 of the World Customs Organisation Harmonised
System and transposed to the EU Combined Nomenclature (Commission Regulation (EU) No 861/2010). This type
of loin is used by canning operations, including by EU processors, for defrosting and inserting into the canned tuna
production process (HS codes 1604 1416 and 1604 1931). This product is distinct from fresh-chilled vacuum packed
tuna loins which are filed as ‘fillets’ under Chapter 3 (0304). This product type is imported to be cut into fillets or
steaks for sale on supermarket fish counters, retailed as pre-packed portions of fresh-chilled or frozen product, or
are used in restaurants.
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