Brussels, 11/04/2001 (Agence Europe) - The European Commission and the United States have concluded an agreement of principal in view of the definitive resolution of the dispute over trade in bananas, announced Pascal Lamy and Franz Fischler, this Tuesday afternoon.
The two Commissioners, which have just informed the EU 15 Committee of Permanent Representatives (COREPER), added that the solution agreed upon during the previous evening rests on historical references - in this case, the 1994-1996 period - for the management of quotas that will last until the arrival of an exclusively tariff based system in January 2006. It enables the United States to suspend, as of next 1 July, the sanctions it has been imposing for two years, with the blessing of Geneva, on various sectors of European industry for the annual total of USD 191 million, then to carry out its definitive withdrawal at the time of the adoption by the Union of a regulation modifying the allocation of quantity quotas. The Commission believes starting from the threat of "rotating" retaliation brandish in America for close to one year, is also lifted: the issue is no long present, felt Mr Fischler, to the extent that the United States will renounce the policy of sanctions in this case. The agreement also contains a two fold promise from the Bush Administration: it will contribute towards the granting of a "waiver" by the World Trade Organisation (Ed.: a derogation to Article 13 of GATT) for the Union to be able to maintain the preferential treatment given to bananas originating in the African, Caribbean and Pacific States, by guaranteeing them an exclusive access to a section of the Community market, and also contributing to the gaining of a "waiver" needed for the Cotonou Agreement with these countries to pass the test in Geneva, indicated Mr Lamy.
"This agreement is, on our side, ad ferendum from the Council of Ministers and the European Parliament to which Franz Fischler and myself will warmly recommend it, stated the Commissioner responsible for Common Trade policy. Both contacted, a little before dawn, the Ecuadorian Minister for Agriculture (the second party directly involved, with the United States, in the multilateral dispute settlement procedure over bananas), to submit to him the Euro-American solution and explain to him the progress this would entail for his country compared to the present situation. Ecuador, which presently has access to ¼ of the quota quantities, would have free access to all of the 2.6 million tonnes that will be opened to all imports by the Union, and thus will be able to play on its competitive advantage, which it has over other suppliers, indicated Mr Lamy while nevertheless conceding: this could be less attractive for Quito than the "first come first served" mechanism, which was adopted by the Union at the beginning of the year, but this is the price to pay to gain the support of other producers, less competitive, to a compromise solution.
Either way, underlined Mr Lamy, the interests of the Union are preserved, those of the ACP as well and this under conditions compatible with the Union undertakings to the WTO. The situation for European producers is not affected by this agreement and the protection given to the ACP is stronger than at present, since the suppliers from the region will be fully entitles to the third quota (ex-quota C), though this share has fallen to 100,000 tonnes compared to the provision foreseen, to fall from 850,000 to 750,000, he said. This transfer of quantity, to the benefit of bananas from other sources whose share will be increase by as much, only reflects the reality and involves no deterioration in the situation of ACP suppliers, their quota being generally not fully used, added Mr Fischler, when summarising: It is a balanced compromise between the interests of the various parties present.
The agreement concluded with the Bush Administration is based on the successive establishment:
Of a system of licences for the allocation of quota quantities, as of next 1 July. To do this, the Commission must propose, by then, to implement this system by allocating the licences in relation to the performances of the operators between 1994 and 1996, which the Commission hopes to do this month, to enable for the suspending of American sanctions hitting certain transatlantic exports from all the Member States except the Netherlands and Denmark (bags, linen, batteries, boxes, paper, etc), on the agreed date. Let us recall that the Union had last year opted for the "first come first served" option, for lack of an agreement between the supplier third countries over the reference period in the framework of the historic option, the United States insisted on an earlier reference in 1993 and the others of various periods after the establishment of the Community import system. Secondly - second legal stage - the Commission will propose to the Council and Parliament to modify the regulation adopted by the EU 15 in January, in order to carry out the transfer of 100,000 tonnes from Quota C towards quota B. It is at this time that Washington will carry out the definitive ending of the sanctions.
1) in 2006, the abrogation of the quotas and the establishment of a customs duty, in accordance with the framework adopted by the Council and Parliament. The issue of the level of customs duties in this context remains open and the Commission will have to, as foreseen, lead negotiations with the main supplier countries under Article 28 of GATT and report to the Member States on the results.
According to Mr Fischler and Mr Lamy, this agreement received a positive agreement from COREPER with, for some a touch of "nostalgia" in the shadow of the ending of a dispute that has been open in Geneva since 1993 and dragging on for a long time. In America, the Trade Representative Robert Zoellick and the Secretary for Trade Don Evans underlined that the step taken today represents a significant breakthrough. It shows the desire of the Bush Administration and the European Commission to work together closely and efficiently over all trade issues. The dispute over bananas, which continued for nine years has been disturbing for all the parties involved - traders, Latin American, African, Caribbean producers, consumers. We are confident that this agreement will put an end to the frictions of the past and allow us to move forward on a better basis for trade in bananas.
Answering questions from the press, Mr Lamy refused to speculate over the political climate of such a complicated dossier. He simply noted that in the end, two and two equal four for everybody and when we reach, after many contortions, an agreement, it is that the interests of the parties in question is preserved, when underlining that the political will had been a determining factor on both sides. The previous administration had no doubt suffered from its age, which removed from it the authority to deliver, he conceded, when referring the prerogatives that Congress had used in the trade field against the Clinton team. Also considering, prudent that time and wisdom allowed for the spirits to mature.