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Thursday, 10 February 2011

Banana export to EU still a slippery issue

The approval by the European Union (EU) Parliament of the bloc's cut in import tariffs on bananas from Latin America has not gone down well in most African, Caribbean and Pacific (ACP) states. For given the costs to these former European colonies of producing bananas for export, they simply cannot compete with the large US corporations, such as Dole, Del Monte and Chiquita which are the beneficiaries of this agreement and are better equipped with the kind of technology that aids efficient production. Essentially, 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. […] 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. That very point was highlighted in a study by the Geneva-based International Centre for Sustainable Trade and Development in 2009 which forecast 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. The study also said that banana prices in Europe will decrease by 12 per cent. 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, we are told, want this money to be topped up and extended to 2020 to help the ACP to diversify their economies. The ACP countries, we assume, appreciate the gesture. However, 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.

Source: Jamaica Observer

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