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From: B-Haile (eritrea.lave@comhem.se)
Date: Sat Feb 12 2011 - 00:17:01 EST
"ACP countries such as Belize, Cameroon, Cote d'Ivoire, Cape Verde, Dominica, Dominican Republic, Eritrea, Ghana, Grenada, Jamaica, Kenya, Madagascar, Eastern Caribbean States, St. Lucia, St. Vincent & the Grenadines, Suriname and Tanzania, that supplied up to 70 percent of the world banana exports in 2007, stand to lose from the deal."
EU's Latin America banana tariff deal questioned .
Friday, 11 February 2011 20:47 .
By Marvin A. Hokstam
The European Union's decision to sign a new tariff deal that benefits Latin American banana producers and leaves out Caribbean countries is drawing fire and scorn. While some observers openly criticize the European body for pulling the rug from under its former colonies, others take it a bit further and urge Caribbean countries to diversify and depend less on preferential trade agreements.
Writing on the wall
Suriname-born, Brussels based lawyer Joyce van Genderen was among the first to hint that the African, Caribbean and Pacific (ACP) countries were likely to end up with the short end of the EU trade stick. Genderen, who advises ACP countries on their EU dealings cautioned Caribbean nations against ratifying an Economic Partnership Agreement (EPA) that the EU was proposing. "Ratifying this agreement will be disastrous to our countries, as it will open our doors to more imports from the EU . yes, our exports will have 100% access to European markets, but we don't have the means to," she had warned.
Her warnings validated only a few days later - on February 3 - when the EU signed a controversial deal that lowers import tariffs on bananas from Latin American countries from ?176 per tonne to ?114 in 2017, narrowing the gap with producers from the ACP colonies who are currently exempt from paying tariffs. ACP countries such as Belize, Cameroon, Cote d'Ivoire, Cape Verde, Dominica, Dominican Republic, Eritrea, Ghana, Grenada, Jamaica, Kenya, Madagascar, Eastern Caribbean States, St. Lucia, St. Vincent & the Grenadines, Suriname and Tanzania, that supplied up to 70 percent of the world banana exports in 2007, stand to lose from the deal.
"The writing is on the wall," she said. "This is a first and disappointing test case that puts the whole meaning of the relationship between the EU and its former ACP colonies into question. This deal the EU signed with the Latin American Banana producing countries will harm the production and export of bananas of ACP-countries. They shouldn't be surprised if Caribbean banana producers start looking for alternative, more lucrative crop."
Van Genderen is joined by several other observers, like French Green Member of the European Parliament (MEP) Catherine Greze, who had voted against the deal, saying that the agreement was a "blow to developing countries and small banana producers" that will benefit big fruit exporters such as US giant Chiquita.
Even prominent UK daily The Guardian questioned the deal. In a commentary entitled "Who are the real winners?", the newspaper writes: "It's the huge scale of the supermarkets and the large producers (Dole, Chiquita, and Del Monte, all South American producers, control more than 60% of production between them in a market worth about $25bn annually) that makes this sort of behaviour possible. Yet again, among the biggest losers are likely to be the associations of smallholders who produce the majority of Caribbean bananas, some of whom are yet to fully recover from hurricane Tomas which ravaged the Windward Islands only three months ago," the newspaper stated.
Lucrative alternative
The ACP in April 2009 already hinted that it doubted the EU's intentions toward its former colonies. In a press release issued then, the association wrote: "35 out of the 77 ACP countries concluded and signed an Economic Partnership Agreement (EPA) with the EU in 2007/2008 to safeguard their interests and their duty free access to the EU-market, because they wanted to prevent having to pay taxes for their products to enter the EU market as from January 1, 2008. That was their main reason to close the EPA with the EU, a full EPA for the 15 CARIFORUM-countries in the Caribbean and interim agreements for 18 African countries and two Pacific countries. The cooperation between the ACP and the EU/EC is based on a "Partnership Agreement," however, the ACP concluded that the EU is not a real partner and that the EU does not really know what partnership is, because a real partner would help to find solutions for problems resulting from measures they implement. The longstanding ACP-EU partnership is in question, now the ACP loses much of its vital existing tariff preferences on bananas."
Van Genderen says it turns out now that the ACP was right to doubt the EU's intentions. "Through the tariff deal with the Latin American banana producers, the EU made it harder for Caribbean countries to compete on the EU market and now, on top of that, they're trying to push the Economic Partnership Agreement through our throats. If Caribbean governments do ratify it, they'll be submitting even more!" she said. She referred to an article she wrote in 2008: "In some islands some former banana farmers have turned to the more lucrative, by the illegal practice of growing marijuana. In St. Vincent and the Grenadines some even formed a Marijuana Growers Association. They staged a march on the capital back then. Guess what their slogan was? 'If they don't want our banana, they will get our marijuana.'"
Impact
But in a sharp-penned editorial, Jamaican daily The Observer says there have long been indications that the EU was leaning in the direction of short-changing its former colonies. "The tariff cut translates to less expensive bananas for Europeans and more profit for the US firms and Latin American countries which waged a relentless 16-year battle for access to the world's largest banana market valued at more than US $6 billion. The history of this conflict demonstrates the oft-repeated adage that there's strength in unity, a reality that Caricom still needs to accept. But just as important, it telegraphed to the ACP countries the intentions of the World Trade Organisation (WTO)," the newspaper states, chronicling attempts since 1993 by the EU to end its preferential treatment of exports from ACP countries.
That a new tariff deal is signed for Latin America should not come as a surprise; a study by the Geneva-based International Centre for Sustainable Trade and Development in 2009 forecast that now banana prices in Europe should decrease by 12 per cent. That banana imports from ACP countries will fall 14 per cent, costing them US $40 million a year, while imports from other countries will increase 17 per cent, hardly seems to be a consideration. Although the pact continues to grant ACP countries tariff-free access to the EU, there's no doubt that it will have a severe impact on the ACP states.
The Observer opines: "The EU, in an obvious acknowledgement of this difficulty, has agreed to provide the main ACP banana-exporting countries with 200 million in aid in the 2010 to 2014 period to help them adapt to the change. But the EU legislators want this money to be topped up and extended to 2020 to help the ACP to diversify their economies. The ACP countries appreciate the gesture, but given the number of them among which this aid is to be shared, we can't see it going a far way. We hope that the ACP, especially Caricom, will use this experience to guard against total dependency on preferential trade agreements in the future."
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