Workers check bananas inside the banana-packing factory in Puerto Armuelles, one of Panama's major banana- producing regions, on April 8. Panama's banana trade has shrunk by half in the last decade because of fruit plagues. Latin American producers fear the new European Union banana trade regime proposals would cause multinational producers to migrate to Africa.
DR. MARSHALL Hall, chairman of Jamaica Producers Group, has described the World Trade Organisation (WTO) efforts to liberalise trade as, 'a protection of turf'.
Addressing members of the Trade Policy Committee of the Private Sector Organisations of Jamaica recently, Dr, Hall said that no banana-exporting country really wanted to see the European Union (EU) regime dismantled, but rather a shift in the preference system underpinning the regime.
Minister of Agriculture Roger Clarke, who also addressed the meeting, cited the decision by the EU to implement a tariff only regime starting in 2006 as a major challenge to the banana industry. Minister Clarke explained that the quotas that African Caribbean Pacific (ACP) banana-exporting countries now enjoy will be abolished and replaced by tariffs.
Jamaica's Latin American competitors, the minister said, currently pay tariffs of 75 euros per tonne in quota, 618 euros per tonne for exports outside of quota, and are now asking for a tariff below 75 euros (J$5,625). The ACP countries are reclaiming a tariff of some 275 euros per tonne, he noted.
Dr. Hall said the EU represented the most attractive market for these countries as there is not much interest in exporting to the United States or even Japan.
He noted that the attractiveness of the European market was because of its restrictive nature, and observed that Chiquita bananas out of the U.S. wanted a zero tariff, failing which they would prefer that the system be left as is.
Dole, currently strong in Africa, Central America, Ecuador, and establishing roots in Brazil and Del Monte favoured a more open market, he said. There is pressure to change the regime which started with Chiquita and Dole and support from Latin America. Dole wants a tariff-only regime and Chiquita wanted a licence-only regime like that from which the ACP countries currently benefit.
Dr Hall pointed out that European growers are currently receiving subsidies of 300 euros per tonne. He also noted that at the Doha meeting of the WTO, a settlement was arrived at that as at January 2006 no Most Favoured Nation (MFN) Latin American country must be made worse off by the change in the EU's banana regime. The African Caribbean Pacific (ACP) countries were not mentioned in the agreement.
He noted that the Cotonou Agreement however, speaks to the issue of the ACP and cites that the new agreement should not do too much harm to ACP countries. The EU has subsequently announced a proposal for 230 euros. Following rules in the WTO, three arbiters have to pronounce by the end of July on whether the proposed 230 euros will leave the MFN countries worse off or in the same position and if worse it will revert to the EU, which will have thirty days to consult with the Latin Americans.
"Jamaica Producers and the rest of the industry have come to accept that there will be a reduction, although we do not expect it to be as low as 75 euros that some Latin American countries are requesting. We believe it may fall between 150 and 200 euros," he said
Minister Clarke affirmed that "whatever the tariff regime decided on there will still be life afterwards for the industry, as long as we strive for efficiency every step of the way ."
