Banana imports: Commission proposes to open tariff-only
negotiations
The European Commission has today taken another step to
modify the EU’s import regime for bananas. As agreed by the
Council of EU Ministers in 2001, the move to a tariff-only
system shall take place no later than 2006. To ensure this,
the European Commission has today proposed to the Council to
open WTO negotiations. Once the Council has agreed, the
Commission will negotiate the import tariff for bananas with
the relevant producer countries. It will seek to maintain
the same level of protection and preferences for African,
Caribbean and Pacific (ACP) countries as the existing regime
provides while entirely respecting its obligations and
commitments vis-à-vis other trading partners, EU producers
and EU consumers.
“We are now moving to the final phase of our agreement and
replacing the complex quota system by a simple tariff
system. What will change is the import regime, not the level
of protection. If our Member States agree, the Commission
will negotiate an adequate tariff level. We will have to
square the circle and safeguard the sometimes conflicting
interests of our consumers, producers and trading partners”,
Franz Fischler, EU Commissioner for Agriculture, Rural
Development and Fisheries said.
EU Trade Commissioner Pascal Lamy added: “We are sending a
clear message today: in opening the last phase of the change
our banana regime we will fully respect our WTO commitments,
while paying particular attention to the situation of ACP
countries and safeguarding the interests of EU producers.”
The move to tariff-only
Settling the long standing WTO dispute, in the
understandings between the EU and respectively Ecuador and
the United States on bananas the EU undertook to introduce a
tariff-only regime for the import of bananas no later than 1
January 2006. The Understandings also provide that GATT
Article XXVIII negotiations shall be initiated in good time
to that effect. GATT Article XXVIII sets out the rules and
procedures to be followed when a WTO member intends to
modify its schedule of tariff commitments in the WTO.
The Commission is proposing negotiating directives to be
adopted as soon as possible by the Council so that
consultations and negotiations can be started with those WTO
partners who have negotiating rights as soon as possible.
Safeguarding the interests of EU producers and ACP countries
In the course of the negotiations to move to the tariff-only
regime, the Commission intends to safeguard the interests of
the EU banana producers, by seeking to maintain a level of
protection equivalent to the current one, as provided for by
the current common market organisation (CMO) for bananas.
In the course of these negotiations, the Commission also
intends to pay particular attention to the implications of
the change in the EU’s import regime for ACP banana
producers. The Commission will examine appropriate ways to
address their specific situation, including preferential
access for ACP products and shall seek to maintain a level
of preference to the ACP countries equivalent to that
afforded by the enlarged EU of 25.
Adapting the regime to EU enlargement
The preparation of the move to a tariff only system follows
steps already taken in view of the accession of the ten new
Member States on 1 May 2004. Appropriate arrangements have
been made to ensure sufficient supply of bananas to
consumers in the enlarged EU.
First, the Commission has increased the current import
volumes of bananas by an additional quantity of 300.000
tonnes for the period 1 May to 31 December 2004. This
quantity was set to ensure market supply in the new Member
States. These transitional measures are without prejudice to
the decision taken by the Council to move to a tariff-only
import system no later than 1 January 2006 and to the
outcome of negotiations to compensate relevant WTO members
for the enlargement of the EU and the move to a tariff-only
system.
Second, the EU intends to negotiate, according to WTO rules
(Article XXIV.6 of GATT), with relevant third countries
possible trade compensations for the increase in the import
duties for bananas resulting from the application of the EU
15 tariff to the ten new Member States.
The Commission is currently evaluating the various claims
submitted and will negotiate with relevant third countries
as a matter of priority.
Background
The current import regime for bananas
The Understandings reached with respectively the United
States and Ecuador in April 2001, after a challenge to the
EU’s banana regime in the WTO dispute settlement system,
provided for a number of modifications to the EU’s banana
regime. Council Regulation 404/93 on the common organisation
of the market for bananas was modified accordingly, and the
relevant Commission regulations repealed and replaced. The
Understandings provide for the introduction of a tariff-only
import regime no later than 1 January 2006 and until then
for an interim regime in two phases.
Since 1 January 2002 the import of bananas into the EU has
taken place through import licences distributed on the basis
of past trade. The current import licence arrangements are
largely managed on the basis of historical references (83 %
of the quantities of the quotas go to "traditional
operators" within the A/B quota and 89% within the C quota).
However, to ensure that non-traditional operators can pursue
trade in bananas, 17 % of A/B quota and 11% of the C quota
are reserved for operators who do not have a suitable
historic reference (non-traditional operators).
The following tariff quotas apply:
Quota A 2,200,000 tonnes at a tariff
of € 75/t (0 for ACP bananas)
Quota B 453,000 tonnes at a tariff of
€ 75/t (0 for ACP bananas)
Quota C 750,000 tonnes at a tariff of
€ 0/t (reserved to ACP bananas)
Quotas A and B are open to bananas
from any origin, the C quota is reserved for ACP
countries.
Banana imports outside the quotas are subject to a
customs duty of € 680/t.
ACP countries benefit from a tariff preference of €
300/t.
To take account of EU enlargement, an additional import
quota of 300,000 t at a tariff of € 75/t was opened as a
transitional measure for the period 1 May to 31 December
2004.
