Ross Sheil and Damion Mitchell, Staff Reporters
HALL
THE REVISED European Union (EU) tariff on imported Latin American bananas that continues to favour African, Caribbean and Pacific (ACP) states was yesterday ruled illegal by the World Trade Organisation (WTO).
Under the tariff set for launch in January 2006, ACP exporters would continue to export duty-free, while Latin American exporters would pay 230 euros (J$17,350) per tonne, which the Latin Americans argued would have a "devastating affect" on their economic development. Exports to the EU from Latin America are currently limited by quota, with a duty per tonne of 75 euros for the first 2.7 million tonnes exported, and 680 euros (J$51,297) per tonne thereafter.
Speaking from the Denbigh agricultural showground in Clarendon yesterday, Dr. Marshall Hall, chairman of the Banana Exporters Association, expressed his dissatisfaction at the WTO ruling. "It is not at all in our favour and we are not happy."
Bananas, stressed Dr. Hall remained important to Jamaica. "We bring in about US$25 million (J$1.55 billion) a year and are employing about 10,000 people. More importantly, the farms of Annotto Bay and Golden Grove will be virtually devastated."
And Prime Minister P.J. Patterson, also speaking from Denbigh, yesterday said: "We are now actually examining the implications of that ruling. I have already initiated a process of diplomatic action for us to insulate ourselves as far as we can from any adverse effects that will flow from that ruling."
The EU had established the regime to protect the banana industry in ACP countries against competition from larger Latin American producers. Most were former colonies, and their banana crop had long received preferential treatment similar to the EU's preferential pricing regime for ACP produced sugar, which it abandoned when the WTO also ruled in favour of complainants.
Dr. Hall, however, believes the EU remained "on our side" and there would be no question of the EU abandoning its support for ACP producers who would continue to work closely together. "We are talking to the EU and we are trying to get a price close to the EU's proposed tariff of 230 euros ($17,350)."
"We will start consultations with interested parties without delay," said EU Trade Commissioner Peter Mandelson. "I hope that everyone will cooperate in finding a mutually acceptable solution within the strict deadline set by the WTO."
The EU has 10 days to reach agreement with the nine Latin American complainants: Ecuador, Colombia, Costa Rica, Guatemala, Honduras, Panama, Brazil, Nicaragua and Venezuela. They had argued that the new rate violated the agreement between them and the EU and that the change should "at least maintain" their access to the EU market, which the WTO supported.
LOWER THE TARIFF
This, the latest WTO ruling on the issue also questioned how the EU arrived at its 230 euro charge, albeit without suggesting a new figure. Latin American producers wanted the EU to lower the tariff to 75 euros ($5,658) while ACP producers wanted it increased to 275 euros ($20,745).
The EU had earlier this year announced its replacement to the tariff quota system which the WTO had ruled illegal following the 'Banana Wars' of the 1990s when the WTO ruled the EU's support for ACP countries discriminatory towards the complainants, Latin American producers and United States-based companies. The EU was ordered by the WTO to introduce a tariff-only system by January 1, 2006.
Latin American producers supply about 60 per cent of the EU market, ACP producers 20 per cent and EU producers 20 per cent.
