Brussels, 27 October 2005 - The European Commission will study carefully the implications of today's decision by the World Trade Organisation's arbitrators to reject the proposed new import tariff for bananas. The Commission had proposed a single tariff of 187 euros per tonne for bananas imported from countries – mainly in Latin America - enjoying Most Favoured Nation status, as well as a duty-free quota of 775,000 tonnes for ACP bananas, as from 1 January 2006. It is regrettable that the arbitrators did not use this opportunity to provide more clarity as to how this long-standing dispute could be resolved.
Mariann Fischer Boel, EU Commissioner for Agriculture and Rural Development, said: “We are surprised and disappointed that the arbitrators did not back our proposal. We believed that the system we proposed would have maintained access to our markets in a fair manner. We calculated the proposed tariff in a neutral and transparent manner, based on a comprehensive legal and economic analysis. We will now carefully study the decision before deciding how to proceed.”
Background
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 arbitration decision reached today was requested by Brazil, Colombia, Costa Rica, Ecuador and Guatemala, Honduras, Nicaragua and Panama and Venezuela, while the relevant ACP countries were granted limited participation rights.
The first arbitration award issued on 1 August 2005 found that the proposed tariff of €230/tonne 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. The revised proposal was designed to at least maintain total market access for MFN suppliers and an equivalent level of preference for ACP bananas.
The Commission had three rounds of consultations with the interested parties on 5 August, 16 September and 21 September. Regrettably, on none of these occasions did they engage in a meaningful discussion or present a counter proposal. The Commission also held consultations with the interested ACP countries on 4 August and 12 September.
On 26 September, the Commission requested a second arbitration on its revised proposal.