Jul 7, 1998

EU'S VOW ON CARIBBEAN BANANAS HARD TO KEEP

 

Brussels, Jul 3 (IPS/Niccolo' Sarno) -- Plans to revise Europe's banana trade deal with developing nations, so as to fit the world trading rules, mean only bad news for the Caribbean. Whatever theEU decides, the islands' small farmers and their families will be worse off.  

"The EU made a commitment to protect our banana market until the new millennium. Instead, it has turned its back on us," accuses Renwick Rose, coordinator of the Windward Islands Farmers Association.

EU agriculture ministers last week announced a complete overhaul of the EU's banana trade 'regime', part of the bloc's massive Lome Convention trade and aid programme, to bring it into line with World Trade Organisation (WTO) rules by January 1999.  

The WTO has ruled against the EU banana regime's system of import preferences for banana produces from the Africa, Caribbean and Pacific (ACP) group of nations. Following complaints by the U.S. and Central American nations, the WTO said that parts of the regime, such as trade import licensing agreements and the dividing up of quotas among ACP states, breach free trade rules.  

Now the EU, which consumes some four million tonnes of bananas a year must open up a market worth some two billion dollars to all exporting nations -- or, theoretically, face trade sanctions.  

The new pact, which must withstand any further challenges from the WTO, does not change existing tariff quotas, one of 2.2 million tonnes and the other of 353,000 tonnes, with a duty of 75 ECUs (83 dollars) per tonne for non-ACP bananas and duty-free entry for ACP bananas.  

The main changes proposed involve the setting up of a new licence distribution system, an aid package to be worth about $400 million to assist producing countries during a 10-year transition process, and the end of country-specific quotas for ACP states.  

But the UK Presidency project, an association of British development NGOs, says the EU's decision "imposes one single 'block' quota for all the 71 ACP states. That quota will be dominated by the big transnationals, who can produce bananas at half the cost of the Caribbean fruit."  

Already unable to compete against the massive industrialised banana plantations run largely by US TNCs in Central America, the Caribbean states could find themselves competing against the same giants in their protected markets.

Banana TNCs are already moving into ACP countries, in West Africa, where they will be able to take advantage of a future block quota. "The TNCs have already increased production and are gearing up to push the smaller producers out," the co-president of the ACP-EU Joint Assembly, Glenys Kinnock, recently warned.  

The new system, as announced last Friday, sets itself the major objective of guaranteeing that "no ACP state... will be placed in a less favourable situation than in the past or present," and commitment that will be hard to meet. 

About 20% of the bananas consumed in the EU every year are supplied by producers within the EU -- in Madeira, the Canary Islands, and the French Overseas Departments. The remaining 80% are imported.  

Of EU banana imports from outside, 21% come from twelve ACP countries: Cote d'Ivoire, Cameroon, Surinam, Somalia, Jamaica, St Lucia, St Vincent and the Grenadines, Dominica, Belize, Cape Verde, Grenada and Madagascar (known in EU terminology as 'traditional' ACP countries). Three percent come from other 'non-traditional' ACP states and the rest, 76 percent, come from third countries, mainly Ecuador, Colombia, Costa Rica and Honduras.  

Small banana farmers in the Caribbean say that without preferential agreements they cannot compete in an open market against the cheaper 'dollar bananas' grown industrially in Central America. They are well placed to scoop up the rest of the market. 

"Windward Island farmers may be out of business within the next two years," says Elias John of the Windward Islands Farmers Association. A third of the labour force in the Windward Islands is dependent on the production of bananas, with seventy percent of their land area devoted to their production.  

Guaranteed access to the European market is seen as the key to the livelihoods of thousands of farmers in the Caribbean, sustaining the economies of several countries in the region. Many believe that if the banana industry collapses, social unrest and economic decline could follow. Many warn that the only other export crop that could provide them with a living is cannabis. 

"Take away the (Caribbean) banana industry and the economy collapses. There will be mass poverty. It's a simple equation," said Phil Bloomer of the British NGO Oxfam.  

Britain's agriculture minister, Jack Cunningham, says the deal on bananas meets WTO obligations. "I personally have been very concerned to ensure that the revised arrangements secure continuing stability in the Caribbean as well as being fully defensible in the WTO," said Cunningham, after chairing a meeting of EU agriculture ministers last week. EU spokesman Gerry Kiely said the new banana regime will be "fully compatible" with the WTO ruling.  

But Dutch agriculture minister Josef van Aartsen, who opposed the adoption of the new regime, said that in his view it did not. 

More importantly, the governments of Ecuador, Guatemala, Honduras, Mexico, and Panama, which initially brought the complaint against the EU's original banana regime to the WTO, and the United States, home to the trio of multinationals that dominate Central America's banana industries, Dole, Del Monte and Chiquita Brands, all say the new proposal does not meet WTO rules. 

Independently from that, a major stated objective of the banana regime, the maintenance of the EU commitment that "no ACP state (...) will be placed in a less-favourable situation than in the past or present" will become more and more difficult to reach.