ACP countries slam proposed changes to EU Banana Tariffs

African, Caribbean and Pacific (ACP) countries have spoken out against proposed changes to the EU’s banana tariff regime, which they say would harm their exporters.

”We are very disappointed by our partner the European Commission because they are sacrificing development to trade liberalisation,” said Gerhard Siwat, the Surinamese ambassador.

”We quite often have the feeling that the European Commission does not understand what partnership means,” he told a press conference in Brussels on 6 April.

EU banana import policies have been the subject of a decade-long row at the WTO, pitting Brussels against several Latin American banana producers and the US. At issue is the EU’s current import regime: a 176 euros/tonne tariff on bananas from most-favoured nation (MFN) suppliers, alongside a 775,000 tonne duty-free import quota reserved for ACP states, many of which are former European colonies.

Latin American countries have long insisted that this import regime illegally discriminates in favour of bananas from ACP countries and violates WTO rules on quantitative restrictions. The WTO’s Dispute Settlement Body has supported such claims, and Brussels is now under pressure to revise its policies.

To that end, the EU proposed in February to lower the current tariffs of 176 euros per tonne to 114 euros per tonne by 2019. That offer marked a slight shift from a tentative deal that was tabled last summer, in which the EU committed to reaching the 114 euro mark three years earlier, in 2016. But that deal fell through when high-level trade talks collapsed in Geneva at the end of July.

The new proposal is based on the same approach, except that the tariff, after an initial decline, would be frozen at 136 euros per tonne from 2011 to 2014. Gradual reductions would then resume until 2019.

In exchange for such tariff reductions, the EU has reportedly called on the several Latin American countries that have challenged the bloc’s banana tariffs at the WTO to abandon those disputes. But Ecuador, which has led the charge against the EU’s current tariff regime, has already rejected that request. “There is no way we will drop the complaints,” Fander Falconi, Ecuador’s foreign minister, said last week.

ACP countries are also unsatisfied with the proposal. Siwat of Suriname claimed that, according to a preliminary estimate, the deal that has been put forward would lead to a revenue loss of at least 350 million euros for ACP banana exporters between 2009 and 2016.

As compensation for such losses, the EU has said it is prepared to offer roughly 100 million euros in aid for the period 2010-2013, but ACP countries say they would need more.

”This helping hand they are offering us is clearly insufficient; 100 million doesn’t even scratch the surface of the needs of our banana growers,” said Federico Alberto Cuello Camilo, ambassador for the Dominican Republic.

ICTSD reporting; “ACP nations oppose EU banana tariff cut plans,” AFP, 7 April 2009; “Ecuador rejects EU call to drop WTO bananas suit,” INFOMEDIA, 22 April 2009.


Source: ictsd.net

Publication date: 4/30/2009