The final provisional Eurostat import statistics for EU banana imports in 2007 show that the Dollar bloc increased its share of the market in absolute and relative terms, despite paying the �176 per MT import duty. EU imports of Dollar fruit increased by 325K MT for a 73% share of the market – imports of ACP fruit fell 80K MT for a 16% share. EU production also fell an estimated 92K MT for an 11% share.
Although ACP bananas enjoy a duty preference over their Dollar rivals there are in truth two very separate realities for African and Caribbean banana production. Investing in politically and economically unstable Africa is dependent as much on corporate geo-politics as it is on industry competitiveness; if the EU import tariff for Dollar bananas is significantly reduced then there is little incentive for the multi-nationals to invest or even stay.
Instead they will simply abandon the continent to focus on procuring fruit from more efficient plantations with more subservient workforces in countries that are more politically and/or economically stable and where they have more influence. What then for some of the world’s poorest peoples who are dependent on the banana business for their livelihood?
There is no evidence to suggest that the WTO grasps this degree of detail but it would be ironic indeed, though not wholly unsurprising, if by supporting the Ecuadorian/US position against the EU on the legality of the tariff the global trade organisation was complicit in the part-destruction at least of economies it was established to help develop.
For the more fragmented and less multi-national dominated Caribbean banana industry it is very different – not least because all the Caribbean bananas are shipped to the UK where 40% of the banana market is now Fairtrade. The Caribbean banana industries may be less efficient than those of their Dollar counterparts but at least they are better protected, albeit indirectly, as long as the British consumer continues to shop conscientiously.
The Latin American banana exporting nations must surely realise by now that ACP bananas do not and will never pose a threat. Although it is highly likely, it is a moot point whether the Dollar bloc has benefited directly through the imposition of a higher EU tariff – a causal link is difficult to establish. But it surely can be no coincidence that producer returns in Central and South America have risen dramatically in the two years since the EU’s new Tariff Only system was implemented despite an equally significant rise in volumes exported? Instead of demanding a lower tariff from the EU the Latin Americans should demand the imposition of a duty free volume ceiling for ACP bananas, which the EU has already intimated it would enforce.
Finally, given that the US has no direct involvement in banana production, its participation in the banana dispute is not only regrettable but also shameful – its interest is motivated more by scoring points against the EU than dispute resolution.
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