EU'S REVISED BANANA TARIFF PROPOSAL MEETS COLD RECEPTION

In the latest development in its longstanding dispute with a number of Latin American banana producers, the EU proposed on 12 September a new most-favoured nation (MFN) banana tariff rate of 187 euros per tonne to replace the 230 euros per tonne level that was deemed to be too high by a WTO arbitrator in August (see BRIDGES Weekly, 3 August 2005). The EU is replacing its current banana import regime, which is based on a combination of tariffs and quotas, with a simple tariff-only system. Its current proposal would see tariff rates rise from 75 to 187 euros per tonne, but would eliminate all quota ceilings as of 1 January 2006.

However, even this lowered rate met with a cold reception from Brazil, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Nicaragua, Panama and Venezuela, which argue that it would not maintain the market access they currently enjoy. These were the countries that sought WTO arbitration over the EU's initial proposed tariff. WTO rules give third parties such as the Latin and Central American banana exporters the right to enter into negotiations and seek arbitration before the entry into force of EU banana tariffs replacing the quota system. If they file another WTO complaint against the EU's new proposal, the latter's implementation of a tariff-only banana import regime could be pushed back past the beginning of next year.

The revised tariff proposal also retains a tariff quota of 775,000 tonnes at zero duty for bananas from African, Caribbean and Pacific (ACP) countries. The Caribbean banana industry, however, expressed disappointment with the EU's new proposal albeit from the opposite perspective -- they argued that the scaled back tariff would have crippling effects on their economies.

ICTSD reporting; "Scaled Back Commission Banana Proposal To Have Crippling Effect On Caribbean," CARICOM REGIONAL NEGOTIATING MACHINERY, 13 September 2005; "Ecuador rejects EU banana tariff proposal," REUTERS, 13 September 2005; "Rebuff for EU in banana dispute," FINANCIAL TIMES, 14 September 2005; " EU Makes New Banana Tariff Offer to Comply With WTO (Update3)," BLOOMBERG, 13 September 2005; "Commission presents revised banana tariff proposal," EU PRESS RELEASE, 12 September 2005.

FALCONER KICKS OFF AG WEEK AS HONG KONG LOOMS

Following on the heels of G-20 ministerial meeting in Pakistan (see related story, this issue), agriculture delegates kicked off the first 'agriculture week' after the WTO's August recess with a formal meeting of the Special (negotiating) Session of the Committee on Agriculture on 13 September. Originally scheduled to begin two weeks later, the meeting was brought forward by the new chair of the farm trade negotiations, Ambassador Crawford Falconer of New Zealand, who will seek to get the talks back on track in the three months before the WTO's Hong Kong Ministerial Conference in December. This is particularly urgent given that delegates failed to reach agreement on a 'first approximations' of agriculture modalities at the end of July (see BRIDGES Weekly, 3 August 2005).

In the invitation to the meeting, Falconer asked delegates to refrain from repeating already-known negotiating positions during the discussions. He asked them to come forward with "genuinely new things to say" on domestic support, export competition, and market access, the so-called 'three pillars' of the farm trade talks. During the meeting itself, he stressed to Members that the aim of the negotiations has changed: the goal is no longer a framework, but rather the actual modalities themselves. In this regard, he asked delegates to consider three questions: whether a comprehensive approach to the agriculture negotiations, tackling a range of issues at once, would work better than the current incremental approach; whether Members would find it useful to start discussing actual numbers under this approach, making the modalities more concrete; and when to discuss linkages across pillars and across issue areas, and which these linkages were. He also made it clear that he expects Members to be on call for negotiations in between the official agriculture weeks.

ICTSD will provide a full report of the current agriculture week in the next issue of BRIDGES Weekly.

ICTSD reporting.