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EU Commission Propose New Banana Regime

by Brian Kenety

Brussels, Oct 4 (IPS) - The European Commission has come up with a plan to resolve the dispute over the European Union’s (EU) banana import regime.  The Commission, which is the executive arm of the EU, says the proposal complies with World Trade Organisation (WTO) dictates and does not harm producers in its former colonies.

The EU, which purchases 40 percent of the bananas sold on the world market, has already been censured seven times by international courts that examined the legality of its import, sales and distribution system for the tropical fruit.

The WTO ruled in April last year that the current EU banana regime discriminated against producers outside of the African, Caribbean and Pacific (ACP) group of states and set a deadline of Jan. 1, 2000 for the EU to bring the regime into compliance.

In November, the Commission put forth a proposal for a transnational quota system under which import licences would be allocated on a “first-come, first-served” basis before a tariff-only regime is implemented. But this was savaged by the Members of the European Parliament (MEPs) who sit on that body’s Agriculture Committee as “agricultural genocide” and EU member states sent the Commission back to the drawing board.

When the EU failed to meet the January deadline, Ecuador, the world’s leading producer, and the United States, home to major transnational corporations that place Latin American bananas on the European market, announced hundreds of millions of dollars’ worth of sanctions against the EU.

These sanctions are supported by the Latin American banana producing states of Colombia, Costa Rica, Guatemala, Honduras, Mexico, Nicaragua, Panama and Venezuela.

The revised proposal from the Commission released Wednesday, retains the “first-come, first-served” basis at its core, but examines the feasibility of using that system to “manage quotas and the implications of a tariff-only system”.

The Commission envisages three quotas which would be managed on a fortnightly or weekly basis (sub-quotas) to ensure a regular import flow into the EU market.

The Commission said in a statement that it believed it had found an acceptable formula for a regime that would guarantee access to European markets for all producers while protecting ACP interests.

For the first two quotas (A and B, set at 2.2 million tonnes and 353,000 tonnes) tariff rates would be set at 75 euros per ton, for the third quota, C, it would initially be set at 300 euros per ton, the level proposed by the European Parliament.

“This level of preference will protect ACP interests without involving a level of tariff which would be prohibitive. In case this assessment proves to be wrong, the Commission should be given the power to reduce the maximum level of tariff during the year, should this prove to be necessary,” it said.

MEPs had argued for a delay in the abolition of import quotas on the fruit until 2010, in order to allow ACP banana growers more time to adjust to global competition, but Latin American interests rejected this scheme. The European legislators fear the ACP will be swamped by the “dollar bananas” produced by multinationals on huge plantations in Latin America.

“After numerous contacts with the parties involved, including banana producers and operators, the Commission confirms earlier conclusions that only a transitional system of tariff quotas, combined with a move, by the year 2006, to a ‘tariff only’ system, strikes the right balance between the different interests,” said the statement.

“Being WTO compatible, transparent and flexible, this system provides a viable alternative to a system based on ‘historic preferences’ [for the ACP states] on which negotiations have reached an impasse,” it said.

EU Agricultural Commissioner Franz Fischler said of the new proposal: “The Commission delivers what the member states asked for. A workable, WTO-compatible system”.

For his part, EU Trade Commissioner Pascal Lamy expressed “confidence that the (first-come, first-served) system we have carefully elaborated to fully comply with WTO whilst catering for the specificity of (EU) and ACP producers, will meet with the approval of member states and the European Parliament, whose concerns we have taken account of”.

He added: “If so, we will finally be in a position to bring this long-running saga to an end and with it the sanctions currently being applied by the US.”

The proposal will be taken up by the EU’s General Affairs Council meeting in Luxembourg on Oct. 9.-SUNS4755

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