Bananas
European
Union adopts new ‘tariff-only’ import regime for
bananas from 1 January 2006
On 29th
November2005, the European Union agreed a new import
tariff of 176 euros per tonne to apply from 1 January
2006 to bananas imported from countries enjoying
Most Favoured Nation status. The new import regime
will also include a duty-free annual import quota
of 775,000 tonnes for ACP bananas, also to apply
from 1 January 2006.
History
Preferences for bananas from
African, Caribbean and Pacific (ACP) countries have
existed in the EC since the UK joined in 1973. A common organisation of
the market was introduced in 1992, as part of the
completion of the Single Market. The resulting quota
system was then the subject of repeated World Trade
Organisation (WTO) challenges in the 1990s – the
so-called ‘Banana Wars’.
The system was found to be incompatible with WTO
rules and the dispute was resolved in 2001 through
Understandings with Ecuador and the United States.
The Understandings commit the EC to eliminating
quotas and establishing a tariff-only regime no
later than 1 January 2006.
The
Commission originally proposed a single tariff of
€230/tonne. However, following a request from a
number of Latin American banana producing countries,
a WTO arbitrator found in August 2005 that the proposed
tariff would not result in at least maintaining
total market access for suppliers under the Most
Favoured Nations (MFN) clause.
On 12
September, the EU presented a revised proposal in
the light of the arbitrator’s award, for an import
duty of € 187/tonne for MFN suppliers and a tariff
quota of 775,000 tons at zero duty for bananas originating
in ACP countries. Again, the arbitrator found that
the proposal did not rectify the matter. With the
arbitration procedure now over, the EU had to set
the rate that would apply as from 1.1.2006.
Economic Partnership Agreements
(EPAs)
Preferential
arrangements under WTO-compatible EPAs between the
EU and ACP are to come into force by 1 January 2008.
Formal negotiations of the new trading arrangements
started in September 2002.
Everything But Arms (EBA)
The EBA
regime was adopted in February 2001, granting duty-free access to imports of all products from least developed
countries without any quantitative restrictions,
except to arms and munitions. It provided
for full liberalisation of imports of bananas from
the 48 identified LDCs by 1 January 2006, by reducing
the full community tariff by 20% every year.
UK Priorities
The UK recognises
the importance of the banana trade to many ACP countriesThe
consequences of preference erosion are potentially
grave, and the UK is committed to working with affected
countries to ensure their needs are adequately addressed.
Contact:
Liz Lalley
Tel: 020 7215 6029
Fax: 020 7215 2235
Email: liz.lalley@dti.gsi.gov.uk
