asked the Minister for Agriculture if he will comment on the way the MCA system is operating on trade in CAP products with the UK at present.
Written Answers. - Trade with UK.
222.
Under the Community's agri-monetary system MCAs are applied to CAP products to compensate for differences arising where the market rate of a currency differs from the "Green" rate which is used to calculate agricultural support prices. Member states with revalued currencies apply positive MCAs as charges on imports and subsidies on exports. Member states with devalued currencies apply negative MCAs which have the reverse effect.
At present there is a positive MCA of 15.1 per cent applicable in the UK because of the continued strength of sterling. While the purpose of MCAs is to maintain the unity of the common price system despite currency fluctuations, they have nevertheless a disruptive effect on trade, particularly when they reach levels of the order now in operation in the UK. Accordingly it is the Government's policy to support measures for the reduction or elimination of MCAs through adjustments of Green currency rates.