 |
|
|
||||||||||||
 |
||||||||||||||
|
||||||||||||||
|
|
|
STATEMENT ON BANANAS As banana suppliers anxiously await the ruling of the WTO Arbitration Panel on the European Union (EU) proposal to dismantle the tariff-rate-quota (TRQ) restrictions on bananas and replace them with a single 230 euro tariff, there has been a flurry of diplomatic activity in the Caribbean and among Latin American banana exporters. For decades, Europe provided secure access on a preferential basis to bananas from the African, Caribbean and Pacific (ACP) group, which are among the most marginalised of trading nations. Currently they are allocated an exclusive quota and provided with duty-free access to the rest of the import quotas. The system has enabled them to trade in a commodity that would otherwise have been impossible, but also benefited Latin American suppliers, who currently account for 75% of EU imports, by providing them with fairer and more remunerative prices than would otherwise have been possible or can be obtained in other major markets. The current proposals by the EU result from a decision in 2001, following agreements with the USA and with Ecuador, to change the quota system and substitute it with an equivalent single-tariff. The Latin Americans who are effectively limited to the TRQ volumes, on which they pay duty of €75 per tonne, objected to EU plans and sought WTO arbitration. To be fair, they can actually lose from the changes, not because they will sell any less, but ironically because overall they are likely to sell more. Various experts and market analysts have computed that the removal of the quota restrictions, even with a tariff of 230 euros per tonne, will eventually cause imports to rise. The greatest danger to producers in Latin America and indeed in the ACP and Europe’s own peripheral regions is that the increased imports will result in price collapse that will not be compensated for by the expansion of sales. Not only will suppliers be harmed directly by price decline, but the considerable, though hidden, benefit of the premium that they and the importers now receive, referred to by economists as “quota-rent”, will be lost. For those suppliers that are the most vulnerable and currently on the margins, such as the Windward Islands, the market upheavals will be truly catastrophic and unless the introduction of the new system is properly managed by the EU, it will result in their exclusion from the market. This was not the intention of the reform and should not be its inadvertent consequence. Unfortunately, much of the public debate has been marred by gratuitous vilification of ACP trade preferences, even if they have been essential to permit these countries to participate, on a remunerative basis, in international trade. The ACP preferences for bananas have already been seriously eroded by earlier changes to the import regime that have improved the relative position of the Latin American suppliers. It is imperative that the EU recognizes the importance to these countries, the most vulnerable amongst the ACP, of safeguarding the continued viability of their export trade. The small islands pose no threat to any other supplier and it would be a complete travesty if the long-standing market-access privileges on which their economic stability is founded, were to be set aside. It would be difficult to understand that during the Doha Development Agenda, one of whose aims is for developing countries “to share in the growth of world trade commensurate with the needs of their economic development” that the ability of weaker trading partners to continue with their only export product would be jeopardized through the WTO system that they themselves and others in the international community created with “a view to raising standards of living”. The Arbitrators will release their conclusion in early August 2005, but it will be vital that the EU and the Interested Parties ensure that whatever subsequent reform of the regime is undertaken, that the principles of equity are preserved so as to ensure that even the small and vulnerable suppliers will be able to continue in their only export business. Brussels, 21 July 2005 Tel/Fax: ++32 (0) 2 534 1840 - specialenvoy.bananas@skynet.be- www.bananasontheline.com |
