14 July 2008

After 15 years of trade wars over the European Union's banana import arrangements, the end may at last be in sight. On Saturday 12th July, the Office of the Director General of the World Trade organisation (Pascal Lamy) tabled a Banana Agreement for the consideration and eventual agreement of the other countries concerned: namely Mexico, USA, Brazil, Peru, Nicaragua, Venezuela, India, China, Philippines, Viet Nam, Thailand and Suriname (on behalf of the ACP group of countries). These countries have been parties to what the WTO calls 'the enlarged good offices on bananas', a process of secret inter-governmental negotiations involving meetings in Geneva, breakfasts in Accra and, doubtless, many others that may or may not go down in history.

Pascal Lamy has certainly given this hottest of international trade potatoes a higher and higher priority since the Latin Americans - then the ACP group and CARICOM - threatened (with increasing regularity) that, if there were no satisfactory banana deal, there would be no wider Doha Agreement on Agriculture or Tropical Goods... and therefore no new WTO agreement at all.

The draft agreement brokered by the European Commission on behalf of the EU with Ecuador, Costa Rica, Colombia, Guatemala, Honduras and Panama is to reduce the banana import tariff into the EU-27 down to 150 euros/tonne on January 1st 2009, to 141 euros/tonne in 2010,then by another 5 euros/t per year to reach 116 euros/tonne on 1st January 2015.

A key part of the proposed agreement, especially from the EC standpoint, is that all parties agree not to initiate any legal action against the EU banana import regime nor challenge the duty-free quota-free market access provisions for bananas between the EC and the ACP countries after the date of the notification of this potential agreement. The EC thereby, of course, eliminates the possibility of reverting to any type of more managed import regime such as tariff quotas for third country bananas.

Source: WTO (Office of the Director General), Geneva, 12/07/08 

... but African, Caribbean and European Producers Protest                                                         16 July 2008

Shortly before the above 'draft agreement' was tabled, leaders of the Caribbean Community (CARICOM) complained of being left out of the talks between the EC and the Latin American governments. They felt the tariff reductions could be "devastating" for the economic interests of their countries. A communiqué stated: "Heads of government observed that in the WTO Doha negotiations, the same group of countries, claiming to be interested in the liberalisation of 'tropical products', has as its main objective the elimination of the small share of the EU market available to banana producers in the African, Caribbean and Pacific countries."

The same week, a delegation of Caribbean, African and European producers told EC negotiators that the proposed deal - which the EC is trying to conclude by 21st July – would impact negatively on ACP and EU growers. "We cannot understand the position since the Latin American countries increased 20% their exports". Francisco Rodríguez Díaz, President of Canary Islands Producers' Association, Asprocan, said "our arguments have caused some debate in the Commission (...) because the effects in the Canary Islands would be very dangerous for our growers". Dominican Republic representatives presented a proposal to limit the reduction to 16€/tonne. ACP representatives also declared that if their proposals are not heard they will not support the multilateral talks at the WTO.

Sources: Jamaica Gleaner, 09/07; Jahir Lombana and ASPROCAN in www.freshplaza.com, 09/07