Stiffer Competition Ahead for African and Caribbean Banana Producers

www.acp-eucourier.info


16/12/2009 - By Debra Percival

The longest running global trade dispute in history - over bananas – may well have have been brought to an end with the deal done at a meeting 15 December at the World Trade Organisation (WTO) in Geneva between ambassadors from the EU and Latin American countries. But for African and Caribbean nations who export to the EU market duty and quota-free under separate trade agreements, stiffer competition lies ahead with Latin American banana producers.

The core of the EU-Latin America deal, which is seen as a boost for the Doha Round of world trade talks, is a gradual reduction by the EU of its import tariff on bananas from Latin America from €176 per tonnes presently to €114 by 2017 at the earliest. The EU has agreed to immediately cut its tariff by €28 per tonne to €148 on the signing of the deal by all parties. This has triggered the United States to settle its related trade dispute with the EU.

“This is the best possible deal we could achieve. It reconciles all parties’ legitimate interests. I know ACP producers will face challenges in adjusting to the new situation. But the EU will do its best to help. With a more stable environment, all stakeholders will be able to focus more on the improvement of production conditions in banana supply chains,” said EU Development Commissioner, Karel De Gucht.

As compensation, the EU says that it will offer funding of up to €200M to help the main African and Caribbean exporting countries to adjust. They include several small islands Caribbean countries who still rely on bananas for a big part of their income including; Dominica, St Lucia and St. Vincent and the Grenadines who have already paired back their production in recent years because of tougher competition from Latin American exporters.

African and Caribbean banana exporters to the EU remain concerned that any cut in the EU tariff makes Latin American bananas cheaper in the EU market, thereby reducing demand for their own bananas which are more costly to produce.

Further, under the deal done, the EU has guaranteed that it will not cut its banana tariff any further in the current Doha Round of WTO talks. EU member states still have to sign the agreement reached. Under the EU’s newly-ratified Lisbon Treaty, the European Parliament must give also give its consent.

For more information:

http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/1938

http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/09/557