Brussels, 17/07/2008 (Agence Europe) - Just ahead of a crucial ministerial meeting on the future of World Trade Organisation (WTO) trade talks (see related article), the European Commission announced on Wednesday 16 July 2008 that it has agreed to discuss a proposal to cut EU import duty on bananas as a gesture to Latin American 'dollar' banana growing countries which have been challenging the EU's import system for years at the WTO (see EUROPE 9664). But this proposal has to be adopted by EU member states, not all of which favour a cut in banana duty because the tariffs protect the market share of imports of bananas grown in ACP states (African, Caribbean and Pacific) or in ultraperipheral regions of the EU.
The European Commission is negotiating on behalf of the EU and has agreed to work for a compromise on the basis of a 'good offices' proposal by WTO Director General Pascal Lamy. The proposal foresees EU banana import duty being reduced from €176 a tonne at present to €116 a tonne by 2015 for non-ACP countries (being reduced to €150 a tonne in the first year, €141 a tonne in the second and then being reduced by €5 a tonne each year until 2015).
The European Commission explains that it is prepared to accept a banana deal in order to make progress in the Doha trade round talks on agriculture in general, on the grounds that resolving the banana dispute is necessary to ensure an overall agreement. The Commission feels that tropical products are crucial to the Doha Round farm talks.
“Resolving this long-running problem must be part of a final Doha deal. That means balancing the needs of two different sets of developing countries, while taking into account the interests of EU banana producers,” explained EU Trade Commissioner Peter Mandelson. This gesture from the EU will be welcomed by Ecuador and the United States but may concern the ACP states which, if they fear the EU is sacrificing bananas for Doha, may threaten to block the WTO talks.
On the fringes of the Agriculture Council on Tuesday 15 July 2008, EU Agriculture Commissioner Mariann Fisher Boel confirmed that the EU and banana growing countries were seeking a solution, with the aid of Pascal Lamy, to settle the stormy banana issue once and for all. We are doing our best to recognise the interests of Latin American countries on the one hand and ACP states on the other, she explained. In ten years, she said the EU had been involved in eleven trade disputes at the WTO concerning bananas, and the European Union had lost each time. A final solution now had to be found to end the litigation, she added. French Agriculture Minister Michel Barnier described the concern to end the dispute as “fairly legitimate” (“assez legitime”) but added that several EU banana growing countries have called for tariff protection not to be unravelled to the extent that protection will no longer be possible in peripheral EU regions and “many” ACP states.
Since January 2008, the EU has operated two categories of banana suppliers: ACP states, which have a shared duty-free quota of 775,000 tonnes of bananas a year, and other countries, which pay EU import duty of €176 a tonne. (L.C./transl.fl)