The EU’s replacement of its quota-based banana import regime with a tariff only system for the majorti of its imports means that all bananas sold in the EU market - with the exception of EU bananas and ACP bananas until at least 2008 - will be “competing on a level playing field”. The consequence of this is likely to be that the “cheapest” producers - with the lowest social and environmental standards - will capture successively more and more of the market, forcing out those producers who pay living wages to banana workers and those who practice more environment-friendly approaches to farming. The “level playing field” will probably accelerate the existing “race to the bottom”. Many believe that the dream of liberal economists to create just such a “level playing field” is flawed for precisely this reason.

When it comes to its development objectives, the EU is committed to supporting sustainable systems, but the tariff only system will punish more sustainable systems of production and reward the least sustainable producers. Under a system of “differentitated” or “graduated” tariffs, the level of import duty at the border of the EU-25 would be reduced for traders selling a product which met certain social and/or environmental standards. For example, a banana that has received both Fairtrade and organic certification could enter at the lowest tariff, even duty-free. Those bananas which met the main international labour standards and, for example, the supermarkets' own EUREPGAP standards would perhaps have a tariff of reduction of 25%, etc. The details would need to be negotiated between all parties.

The key issue for the trade union and other civil society organisations proposing the idea is that competition would become much fairer as producers would not be penalised for their adherence to principles of sustainability. The monitoring and verification of compliance with standards, in order to receive tariff reductions would obviously have to involve any governments giving such trade concessions. To be credible with consumers the system would also have to include civil society participation. One of the potential objections to an approach like this is that at first sight it appears to break WTO rules, which normally disallow discrimination on the basis of the method of production. However, a closer examination of the details of the WTO rules - along with a number of precedents set by earlier WTO rulings - suggests that tariff differentiation would be WTO compliant.

Further Reading

Bananas: Differentiating Tariffs According to Social, Environmental and/or Economic Criteria, James Harrison and Liz Parker , Commissioned by EUROBAN and IUF, Norwich, January 2004

Developing Countries, International Trade and Sustainable Development: the Function of the Community's Generalised System of Preferences (GSP) from 2006 to 2015 European Commission Communication to the Council, Brussels, July 7 2004

Feasibility Study on Preferential Tariffs for Sustainable Produce, Centre for Agriculture and Environment, Utrecht, March 2003