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EU - new tariff for bananas to the WTO

Banana imports: Commission announces envisaged new tariff for bananas to the WTO

The European Commission has notified today to the WTO its intentions concerning the level of duty in the new tariff-only system for the EU’s import regime for bananas. The new tariff proposed by the Commission of 230€ per tonne for most favoured nation (MFN) suppliers - mostly in Latin America - is intended to replace as of 1 January 2006 the present regime based on tariff quotas. The new proposed duty preserves the current level of market access for WTO members exporting bananas to the EU under the WTO’s most favoured nation conditions. The Commission has proceeded with this notification to the WTO under the terms agreed in Doha in 2001. These terms had been explicitly requested by the Latin American exporting countries, and they provide for the possibility of arbitration on the level of the tariff. The EC will maintain a preference for African, Caribbean and Pacific (ACP) countries, in a manner respecting entirely the EU’s obligations and commitments towards all interested parties. The Commission also welcomes as a new and positive element the efforts undertaken by the Presidents of the Latin American exporting countries to foster their cooperation and their openness to discuss the issue with the EU. The Commission intends to intensify its dialogue with these countries in a positive and constructive manner. The Commission would like to stress that the notification of its intentions to the WTO is an unavoidable procedural step that does not preclude constructive engagement with the exporting countries.

“The Commission is fully committed to respect the terms of the agreement on bananas approved by consensus in Doha in 2001. These terms, which provide for the move to tariff-only by 1 January 2006 and allow recourse to independent arbitration on the level of the tariff, were explicitly requested by Latin American exporting countries. The EU banana import regime is changing but the level of protection is not increasing. The proposed new tariff is based on a methodology to calculate tariff equivalents enshrined in the WTO texts and on objective data. I believe this figure and methodology has allowed us to square the circle and safeguard the sometimes conflicting interests of our consumers, producers and trading partners”, Mariann Fischer Boel, EU Commissioner for Agriculture and Rural Development said.

“We will be faithful to our international obligations acting in a fair and transparent manner, which I believe is in the interest of all WTO Members. The timetable agreed in the WTO means that we are obliged to introduce a tariff only system no later than the 1st of January 2006.We have to notify our proposal to the WTO now in order to meet that date.” said Peter Mandelson, EU Trade Commissioner

The proposed new duty and the WTO methodology on which it is based have been discussed in depth with the four Latin American banana exporting countries which have the right to negotiate with the EU the modification of its banana import regime under GATT Article XXVIII rules.

The Commission is confident that the procedures of the WTO Waiver provide a good structure to resolve this issue.

The WTO Waiver for the Cotonou Agreement between the EU and ACP countries agreed in Doha by all WTO members provides for the possibility for WTO members exporting bananas to the EU on a most favoured nation basis to ask for arbitration on the level of the proposed duty. The current MFN duty on bananas is 680€ per tonne. Under the transitional system currently in place, bananas from MFN origins are subject to tariff rate quotas (and to an in-quota duty of 75€/t).

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