At least five Latin American banana-producing countries beat today’s (Saturday’s) deadline to object to the European Commission’s proposed new single tariff on EU banana imports.
The EU has proposed imposing a fixed tariff of €230 per tonne on exporting nations under a new tariff-only system, due to be introduced on January 1, 2006 and designed to replace the multiple tariff and quota system that favours producers from certain countries at the expense of others.
Alistair Smith, international co-ordinator for trade body Banana Link, said that implementation of the tariff was now sure to be be delayed. “Arbitration will take at least six
months to be heard,” he said. African, Caribbean and Pacific (ACP) countries are said to favour a higher tariff of €300 per tonne because their production costs are up to double those of the Latin American countries, and they need a high tariff to compete.
Latin American countries want to pay a maximum of €75 because they are the cheapest producers and believe that consumption will increase if a low tariff is set.
Arbitration on the level of the tariff can be sought under terms agreed at world trade talks in Doha in 2001. Appeals will be handled by the World Trade Organisation in Geneva.
Smith said: “We believe a single tariff at any level would be bad for the industry, though it is looking like the most likely scenario. A single tariff means that the EU gives up any tools it has to manage the volumes of bananas, so prices go down.
“This encourages the ‘race to the bottom’ in that companies will all be seeking cheap bananas, which means greater social and environmental costs.”
The implications of a new tariff system will be discussed at an international conference in Brussels at the end of April.
Greg Meenehan
The EU has proposed imposing a fixed tariff of €230 per tonne on exporting nations under a new tariff-only system, due to be introduced on January 1, 2006 and designed to replace the multiple tariff and quota system that favours producers from certain countries at the expense of others.
Alistair Smith, international co-ordinator for trade body Banana Link, said that implementation of the tariff was now sure to be be delayed. “Arbitration will take at least six
months to be heard,” he said. African, Caribbean and Pacific (ACP) countries are said to favour a higher tariff of €300 per tonne because their production costs are up to double those of the Latin American countries, and they need a high tariff to compete.
Latin American countries want to pay a maximum of €75 because they are the cheapest producers and believe that consumption will increase if a low tariff is set.
Arbitration on the level of the tariff can be sought under terms agreed at world trade talks in Doha in 2001. Appeals will be handled by the World Trade Organisation in Geneva.
Smith said: “We believe a single tariff at any level would be bad for the industry, though it is looking like the most likely scenario. A single tariff means that the EU gives up any tools it has to manage the volumes of bananas, so prices go down.
“This encourages the ‘race to the bottom’ in that companies will all be seeking cheap bananas, which means greater social and environmental costs.”
The implications of a new tariff system will be discussed at an international conference in Brussels at the end of April.
Greg Meenehan
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