EU Makes New Banana Tariff Offer

by Ulrika Lomas, Tax-News.com, Brussels

21 November 2005

The European Commission last week proposed a new offer on banana import tariffs for Latin American producer nations, after its previous offer had been struck down by the World Trade Organisation.

However, the EU's new offer of 179 euros per tonne is only slightly lower than its previous offer of 187 euros, and still way above the producers' demand for a global 75-euro tariff.

The Commission had proposed a single tariff of 187 euros per tonne for bananas imported from countries – mainly in Latin America - enjoying Most Favoured Nation status, as well as a duty-free quota of 775,000 tonnes for ACP bananas, as from 1 January 2006.

Mariann Fischer Boel, EU Commissioner for Agriculture and Rural Development, explained that:

“We are surprised and disappointed that the arbitrators did not back our proposal. We believed that the system we proposed would have maintained access to our markets in a fair manner. We calculated the proposed tariff in a neutral and transparent manner, based on a comprehensive legal and economic analysis. We will now carefully study the decision before deciding how to proceed.”

The new tariff system was intended to replace the present regime based on tariff quotas for MFN – mostly Latin American – supplying countries.

The EU currently applies a tariff rate of 75 euros per tonne for bananas covered by quotas, and 680 euros per tonne for those not covered by quotas.

The tariff level is crucial for the Latin American banana producers, which currently export 3.4 million tonnes of bananas to the 25-state EU, even under the existing regime.

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