Dr. Marshall Hall, Contributor
HALL: We are satisfied from our own analysis that the basis of calculation used by the EU meets the requirement of the arbitrator. - RUDOLPH BROWN/CHIEF PHOTOGRAPHER
WE HAVE just seen a release from the United States trade representative indicating the disappointment of the U.S. that the tariff being proposed by the European Union (EU) is "not significantly lower than its earlier proposal. The trade representative's statement does not take account of the other stipulation of the EU that imposes an absolute limit on the quantity of African, Caribbean, Pacific countries (ACP) tariff free bananas that will be allowed into the EU. This limit represents the amount of bananas actually being imported into the EU from ACP countries.
With this limit in place and a tariff computed under a methodology approved by the arbitrators of the World Trade Organisation (WTO), the only concern about the tariff recommended by the EU is whether, as the arbitrator, the required data used in computing the tariff is based on actual prices. We are satisfied from our own analysis that the basis of calculation used by the EU meets the requirement of the arbitrator.
Moreover, it can be demonstrated using the price gap methodology and 2005 data that the ¤187 tariff recommendation is below that necessary to maintain market access for Most Favoured Nations (MFN) countries. We suspect that the EU in an attempt to satisfy in full the criteria laid down by the arbitrator, erred on the low side in recommending a tariff of ¤187.
NEGOTIATIONS
The release by the United States trade representative further calls on the EU "to continue negotiating with its trading partners to find a mutually acceptable solution to maintain MFN market access". The limit being imposed by the EC on ACP bananas virtually guarantees this result.
We are at a loss to understand how the trade representative could have reached a conclusion on the tariff being too high while by their own admission they continue to study the implications of the "post-January 1 ... market access for a certain quantity of bananas from ACP suppliers". The United States Trade Representative, (USTR) would know that the quantity of ACP bananas recommended by the European Commission (EC) is the amount imported from the ACP in 2003 and is a mere three per cent higher than the existing approved ACP duty free volumes.
Incidentally, these approved duty-free volumes predate the enlargement of the EU by 10 additional countries.
The reality of the EC recommendation is that it is the ACP countries that have lost market access since their volumes remain capped but those of the MFN countries now have unlimited access at ¤187 per tonne as compared with the existing unlimited access tariff of ¤680.
We do not support, but can understand, the special pleading of the MFN countries; we cannot comprehend the U.S. expressing disappointment at a recommendation that guarantees the essence of the US-EU Bananas Understanding.
Dr. Marshall Hall is
chairman of the Banana Export Company Ltd. (Jamaica).
