Brussels / Brasilia, 11/07/2001 (Agence Europe) - The European Union and Brazil have reached an agreement to solve their dispute over access to the Community market of soluble coffee. The compromise announced on Wednesday, shortly before the end of the visit by European Commissioner Pascal Lamy to Brazil, provides for the opening of a zero duty tariff quota essentially to the benefit of this country. The quota should thus restore conditions of competition equal to those enjoyed by other EU suppliers.
"The fact that Celso Lafer and I have managed to reach an agreement on soluble coffee today reflects the positive climate that exists between the EU and Brazil. We look forward to working together to launch a new round in Qatar and to making the EU-Mercosur negotiations a success", commented Commissioner Lamy, speaking at a joint press conference with his Brazilian counterpart.
Last October, Brazil as the second largest producer of soluble coffee in the world after the Union, had filed a complaint with the World Trade Organisation denouncing the eviction of its exports from the Community Generalised System of Preferences, in relation to the preferential tariffs granted to drug producer countries to encourage alternative crops. "Brazil ended up being the only major EU supplier to pay 9% import duties instead of 0 or 3.15% duty like other suppliers", which led to "erosion of its market share in the EU", the Commission today admits in a press release issued by the spokesman's service. In the context of the consultations that followed under the aegis of WTO since the opening of dispute settlement procedure, the EU had initially proposed a quota of 9,000 tonnes for imports from Brazil. Brazil had proposed 15,000. This offer was then upwardly revised (9,500 tonnes gradually increased to 13,500 tonnes in three steps) but in vain. Brasilia's assent was finally secured, depending on a promise to open a zero duty tariff quota for imports of instant coffee whatever the origin, to the tune of 10,000 tonnes in the first year, 12,000 the second and 14,000 the third, with a review planned thereafter. "In virtue of its past export performances, Brazil will be the main beneficiary of this quota", the spokesperson stipulated. Its creation, however, means a delay of a few months, the time it takes to modify the Union's commercial legislation. The other preferential regimes will not be affected by the new quota.