EU adopts new tariff-only import regime for bananas

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The European Union today agreed a new import tariff of 176 euros per tonne to apply from 1 January 2006 to bananas imported from countries - mainly in Latin America - enjoying Most Favoured Nation status. The new import regime will also include a duty-free annual import quota of 775,000 tonnes for ACP bananas, also to apply from 1 January 2006. The decision was taken by EU governments on a proposal of the European Commission.

"I welcome this decision, which follows a long period of uncertainty," said Mariann Fischer Boel, Commissioner for Agriculture and Rural Development. "It will ensure that growers and traders know what the rules will be from 1 January 2006. I am also convinced that this is a fair and balanced result for everyone, which will fully maintain access for Latin American producers while continuing to take into account EU and ACP producers. At the same time our door remains open to continue talks with the Latin American countries concerned."

Peter Mandelson, EU Trade Commissioner said: "The agreement by Member States to a tariff only system is an important signal for traders. The door is not closed to further negotiation with our Latin American partners in order to reach a mutually satisfactory solution. The Commission will continue to monitor carefully the impact of this decision on prices and trade flows."

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 Commission originally proposed a single tariff of €230/tonne. However, following a request from a number of Latin American banana producing countries, a WTO arbitrator found in August 2005 that the proposed tariff 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. Again, the arbitrator found that the proposal did not rectify the matter.

Throughout this process the Commission had several rounds of consultations with the Latin American countries concerned, as well as with the ACP countries concerned. Regrettably, on none of these occasions did the Latin American countries concerned engage in a meaningful discussion or present a counter proposal that could have led to a negotiated solution. With the arbitration procedure now over, the EU had to set the rate that would apply as from 1.1.2006.

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• Opening of tariff quota for bananas from ACP countries (2/2/2006)
• Bananas: EU committed to fair deal for all developing countries - Press conference with EU Commissioner Fischer Boel (14/12/2005)
• EU Commission disappointed with WTO ruling against proposed banana import tariff (27/10/2005)
• EU requests 2nd WTO arbitration on revised proposal for banana import regime (26/9/2005)
• EU Commission presents revised banana tariff proposal (12/9/2005)
• WTO arbitrates over banana import tariff (1/8/2005)
• EU regrets Latin American banana exporting countries request for WTO arbitration on the EU's proposed new tariff for bananas (31/3/2005)