“I welcome this decision, which follows a long period of uncertainty,” said Mariann Fischer Boel, Commissioner for Agriculture and Rural Development. “It will ensure that growers and traders know what the rules will be from 1 January 2006. I am also convinced that this is a fair and balanced result for everyone, which will fully maintain access for Latin American producers while continuing to take into account EU and ACP producers. At the same time our door remains open to continue talks with the Latin American countries concerned.”
Peter Mandelson, EU Trade Commissioner said: “The agreement by Member States to a tariff only system is an important signal for traders. The door is not closed to further negotiation with our Latin American partners in order to reach a mutually satisfactory solution. The Commission will continue to monitor carefully the impact of this decision on prices and trade flows.”
In an effort to put an end to the long-standing banana dispute, the EU agreed with Ecuador and the United States in 2001 to move from a complex import system based on a combination of tariffs and quotas for MFN bananas to a regime solely based on a tariff by 1 January 2006, and obtained two waivers from its WTO obligations for the preference granted to bananas from the ACP countries under the terms of the ACP-EC Partnership Agreement (the Cotonou Agreement).
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.
Throughout this process the Commission had several rounds of consultations with the Latin American countries concerned, as well as with the ACP countries concerned. Regrettably, on none of these occasions did the Latin American countries concerned engage in a meaningful discussion or present a counter proposal that could have led to a negotiated solution. With the arbitration procedure now over, the EU had to set the rate that would apply as from 1.1.2006.