Lavern Clarke, Business Editor
Jamaican lawmakers have signalled that the African Caribbean and Pacific grouping is prepared to fight a decision by the European Union to cave on bananas, saying too many vulnerable economies are invested in the trade.
The EU, under pressure from Ecuador, primarily, and the United States, has said it would accept a World Trade Organisation proposal for the European trade bloc to reduce banana import tariffs from €176 per tonne to €116 by year 2015.
The proposal, which follows from the latest complaint filed by Ecuador, includes an interim cut to €150 per tonne.
The €176 price was itself a compromise implemented in 2006, which Ecuador subsequently complained was anti-competitive.
Could worsen situation
But Caribbean and other countries in the 77-nation ACP have said the new €116 per tonne proposal would worsen the situation for small producing nations already struggling to survive the erasure of preferential prices to its main EU market, and competition from cheaper producers in the Latin American region.
Their bananas largely enter the EU duty-free.
On July 18, Jamaica's Senator Ronald Robinson, a junior minister in the Ministry of Foreign Affairs and Foreign Trade, told lawmakers in the upper chamber of the House of Parliament that the proposed reduction in tariff rates would "seriously compromise the competitiveness of bananas from Jamaica and the rest of the Caribbean in the EU market".
That statement came after meetings between the foreign and agriculture ministries and banana interests here.
Jamaican bananas now appear to be perpetually in recovery mode, with the largest player, Jamaica Producers Group (JP), taking steps to contain its exposure to that side of its business by diversifying almost fully into food services.
The latter is now more than 80 per cent of JP's operation.
Indeed, JP's repositioning is itself symptomatic of domestic banana's declining economic relevance.
Last year when Hurricane Dean hit, damaging 2,359 hectares of the crop, Jamaica earned US$9 million in exports from the fruit; in 2006 when the country was recovering from the 2005 rains, earnings were US$13 million; in 2005, when the industry struggled to shake off the devastation of Hurricane Ivan of 2004, exports brought in US$4.7 million.
But Jamaica, as a member of CARICOM as well as the ACP alliance, is loyal to those for whom banana is still central to jobs and fiscal health.
Conveying Jamaica's position to EU
Senator Robinson last week said action was being taken under the ACP alliance to convey Jamaica's position to the European Commission, Latin America and the World Trade Organisation (WTO).
Robinson was no more specific than that, but there were rumblings in the region even before his statement that CARICOM was prepared to hold a hard line by withholding its vote in trade talks if the issue of preferences for struggling nations was not more equitably resolved.
Publicly, however, the region's acting chief negotiator Henry Gill said in Geneva Monday that the Caribbean was invested in seeing the Doha talks resumed and completed, given its vulnerability to rising global food prices.
Geneva has been the centre stage of the banana wars, which have transcended two decades.
So far the victories have all gone to Latin American producers who are said to control more than 80 per cent of the EU market, and whose banana industry has significant ownership by US-based corporations, notably Dole and Chiquita.
But this month, as the EU decision to give in and cut banana tariffs again was announced, there were signals that the affected parties were prepared to be disagreeable.
Indeed, the WTO has taken note, and itself has signalled that there are back-room talks under way.
"The process is ongoing," said WTO spokesman Keith Rockwell at a news conference. WTO director general Pascal Lamy "is available to help facilitate an agreement in any way that he can", he said.
Said Robinson to his Jamaican senate colleagues:
"We have been embroiled in this banana dispute for over 15 years and it continues to provide serious challenges to the banana industry in the Caribbean region. We need to intensify our efforts to make this industry competitive and to continue the process of diversification. These efforts are critical when juxtaposed against an aggressive campaign to whittle away the margins of preferences from which Jamaica and the Caribbean previously benefited."
Indeed, ACP and the EU have lost about a dozen fights over the period.
The issue became even more complicated this week when, on the margins of talks at the WTO in Geneva to bring the Doha negotiating round back on track, wire reports also signalled that Ecuador
too was prepared to use its vote as veto if events went against it.
