Europe’s old colonies cry foul

By: | at 07:00 PM | International Trade  

Europe’s former colonies attacked plans for a revamped EU banana regime recently, saying a proposed new import tariff was too low to prevent an influx of Latin American fruit driving them out of business.

The EU lost an international trade ruling in the 1990s over its banana policy at the hands of Ecuador, the world’s largest exporter, and the United States. As a result, it vowed to scrap its tariff/quota import regime and move to tariff-only by 2006.

Brussels says it is determined to protect the interests of EU producers and of its former colonies - mostly former British territories - that enjoy decades-old special trade deals.

The EU’s executive Commission has suggested 230 euros ($296.20) a ton as a tariff.

This is much higher than the current base tariff of 75 euros and has infuriated the two main sides in the talks - the Latin Americans, and the African, Caribbean and Pacific (ACP) group.

The ACP countries insist on an import duty of at least 275 euros to stop the lucrative EU market from being flooded by Latin America’s more competitive bananas.

“It should be highlighted that the Latin producers, despite the outcry, will no longer have a quota and therefore will benefit massively,” ACP banana producers said in a statement.

“It is this huge benefit combined with no licences that leads the ACP to agree that 230 euros is too low,” it said. Any duty below 275 euros would seriously harm the development of ACP nations, it added.

The ACP stance is backed by Europe’s main banana producers, France and Spain, and also by African producers - whose fruit is much less competitive than dollar bananas. Africa’s main banana suppliers are Ivory Coast and Cameroon. ACP banana suppliers are likely to see their existing duty-free import deals continue but fear that the removal of quota limits for competitive exporters like Ecuador and Costa Rica will squeeze higher-priced ACP fruit out of the EU market.

“There is a grave risk that anything less (than 275 euros) would result in increasing supplies and depressing prices, thereby making the ACP banana trade unviable,” they said.

But the Latin Americans want a new EU tariff of no more than 75 euros, and preferably zero. Some in this group say they would consult the World Trade Organization - raising the spectre of another so-called banana war if Brussels does not meet their demands. (Reuters)


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