Bananas: EU Ditching Fight against Global Poverty? ACP

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BANANAS: will the European Union confirm that the fight against poverty is no longer a priority in its "Global Europe" strategy?

At a time when European leaders are gathering to welcome the dawn of a new era with the coming into force of the Lisbon Treaty, this change may well prove to be more extensive than anticipated. The coming days could spell the end of the era when Europe considered the fight against poverty a priority.

In the ongoing discussions on the Banana Dossier, the ACP States have made numerous concessions in an effort towards finding a definitive and balanced solution.

In fact, analysis of the European banana market has shown that the customs tariff of €176/t that has been applied to banana imports from Central and South American countries (MFN countries) since January 2006, has sharply increased their presence on the EU market. There is no risk whatsoever, not now nor in the future, given the limited production capacity of the ACP countries that the European market will be “flooded” with ACP bananas. Just one MFN country, like Ecuador for example, could, single-handedly, if it so desired, supply the entire 27-country EU market which, let us not forget, is the only possible trade opening for ACP products.

As a result, it is difficult, at first glance, to understand what is at stake for the European Union when, to the detriment of its commitments to the ACP banana-producing countries, it has proposed that the MFN countries engage in even more extensive liberalization at a faster rate, and suddenly announced an imminent agreement with them.

The ACP countries have repeatedly demonstrated that they fully understand the current trade policy trend which is liberalization. They are therefore in no doubt whatsoever that the trade preferences they currently enjoy will continue to be eroded until they most likely disappear. However, in highlighting the development programme included in the WTO Doha Round negotiations they have merely called for WTO Members to honour their commitments, stressing the need that for any agreement to be balanced, it must necessarily include a transition period with a moratorium, so as to enable the ACP banana-producing countries to adapt to the new market conditions.

In the same context, they recalled the undertaking of the same WTO Member States whereby those among them who granted longstanding preferences must provide financial and additional capacity-building assistance to help remedy supply-side constraints and promote diversification of existing production in the territories of the preference-recipient Members.

In their most recent submission, a pale reflection of their initial demands, the ACP States:

(a) an initial reduction, as “full and final settlement”, from €176/t to €148/t during 2010;

(b) call for the level of 148/t to be maintained, in the event that no agreement is reached on the agriculture modalities of the Doha Round;

(c) accept, in the event of an agreement on the agriculture modalities of the Doha round, a gradual reduction of the customs tariff over ten (10) years, including a 3-year moratorium following application of the first tariff reduction from €176/t to €148/t;

(d) call for financial aid in the sum of 250 million euros, the minimum amount required to meet the needs of ACP banana-supplying countries for the 2010-2013 period; and

(e) an undertaking on the part of the EC to participate in a joint review mechanism designed to assess the situation of the ACP banana suppliers after 2013, and to provide additional resources, as necessary.

In a letter addressed to the heads of several European institutions, including the President of the European Commission, President of the European Council and the President of the European Parliament, Mrs. Eunice Kazembe, incumbent President of the ACP Council of Ministers and Minister of Industry and Trade of Malawi, recalled the fears aroused by the disappearance of the reference to the ACP countries from the Lisbon Treaty. This marks a departure from the texts currently in force, whereas the ACP Group remains the largest grouping of the poorest countries in the developing world, with a longstanding historical relationship with the European Union.

The President of the ACP Council has clearly indicated that Europe has a unique opportunity to allay these fears or to confirm them, depending on the response that the European Commission will give to the ACP demands. This would demonstrate if Europe is definitively adopting an aggressive trade strategy based on its “Global Europe” policy at the expense of a frontline role in the fight against poverty.

For press details contact: iroga@acp.int