Annex: Detailed UK Government Comments
INTERNATIONAL COMMODITY PRICE VOLATILITY
- Before it would consider potential
regulatory responses to recent developments in commodity markets,
the UK would need to see a clear evidence base. It is very difficult
to be definitive about the role of speculation in recent price
spikes, and, whilst the Government continues to monitor relevant
research, there currently appears to be little evidence that the
price formation process on commodity markets has changed in recent
years with the growing importance of derivatives markets. Also,
in light of work by a number of international organisations, the
Government is sceptical that speculation played a significant
role in commodity price spikes.
- At the same time, the UK is very aware of the
importance of commodities markets to farmers, processors and other
market participants around the globe, and believes that improved
transparency and data availability is important to inform policy
making, and aid understanding of the linkages between commodity
markets and raw materials. The UK is promoting measures to
improve food security for developing countries beyond those which
aim to reduce volatility in commodity markets, and strongly supports
initiatives to improve transparency in commodity derivatives.
- Trading in commodities markets plays an important
role in providing the liquidity essential to their functioning. Given
climate change, and the possibility of international agricultural
prices becoming more volatile, the role of agricultural futures
and options markets, and the liquidity they rely on, may become
more important.
- The UK also wants to see greater transparency
in the physical market, in order to improve the efficiency of
price formation and help to reduce the degree to which participants
resort to trade distorting behaviour. Greater awareness of market
data will help producers to manage the most important risks to
their business, and the food price monitoring tool set up by the
Commission will increase transparency of food prices, alongside
existing tools such as that operated by the Food and Agriculture
Organisation (FAO).
- The UK would need to ensure that statutory initiatives
facilitate a more efficient functioning of the market and avoid
measures which create market distortions or increase trade barriers.
- The UK believes that the appropriate response
to volatile commodity prices is to ensure that global commodities
markets in areas such as agriculture are open, transparent and
efficient. Whilst this does not preclude commodity price volatility
(since many commodities are inherently volatile), it should help
to make supply more responsive to higher prices, and price spikes
less frequent and smaller.
ACCESS TO RAW MATERIALS
- The UK supports the strategy
of seeking to remove anti-competitive practices from the global
market but has concerns about a possible stockpiling programme,
which would be contrary to its traditional free market approach.
More information on how this might work in practice would be required
before such a programme could be agreed.
- The UK would have concerns about any proposals
which favoured an interventionist approach that was likely to
create market distortion, or increase trade barriers to the global
supply of raw materials.
- The UK Government supports further work to look
at options to improve governance, transparency, investment, geological
knowledge and skills on extractives in developing countries, especially
through international measures which set global standards.
- The UK agrees with the importance of boosting
resource efficiency and recycling, but notes that there is no
reference to the infrastructure needed at EU level to reuse the
recycled material, and considers that more analysis is needed
on how to achieve the optimum economic and environmental balance.
It believes that the introduction in 2012 of further EU legislative
proposals on waste management would be premature as the revised
Waste Framework Directive will by then only have been implemented
for just over a year, and the priority should be on enabling Member
States to implement that measure.
- The UK is unconvinced of the need to specify
inspection requirements for waste shipments in a legal instrument,
and already has a comprehensive programme of inspections, spot
checks and enforcement in place, based on an intelligence-led
approach, coupled with a programme of inspection of waste sites
and communication with established waste operators.
- Setting binding legal parameters on the inspection
regime would fetter local discretion as to the most appropriate
enforcement of the controls. Also, the revised Waste Shipments
Regulation is a relatively new instrument, and Member States have
only just reported at the end of 2009 on the first full year of
activity. Until a full analysis of that information is available,
it would be premature to introduce binding inspection criteria.
- The UK is sceptical about applying a global certification
scheme for recycling facilities for the export of waste streams,
and considers that the best approach involves targeted, intelligence-led
enforcement activity, which is already being undertaken, adding
that any form of certification scheme could be burdensome without
any environmental gain.
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