 |
Whatever else can or cannot be said about the outcome for EU banana policy, the banana dispute has proved that the WTO means business. It has proved that some member governments and international companies have better access to its services than small developing country governments, never mind the citizens. Even the chosen legal representatives of the small developing countries most likely to be affected by the outcome of the dispute were initially denied access to the process of 'dispute settlement'. The credibility of the World Trade Organisation is sorely tested, whatever words of reassurance and acceptance might have been coming from the Vice-Commissioner of the European Commission, Sir Leon Brittan. The panel of three appointed by the WTO to judge the appeal was chaired by a US expert.
The fact also remains that, in this case, the two main protagonists do not have - and never have had - any trade between them in the commodity in dispute. Ecuador was brought in to give the necessary credibility to the USA-led challenge. The appeal ruling, which was released to the parties late on Friday 5th September, merely confirmed that the USA was a legitimate complainant in a dispute over EU banana policy, even though no Hawaiian bananas leave the USA. And, lest we forget, the WTO dispute grew out of a Super-301 investigation called at the behest of Chiquita Brands International and the Hawaiian Banana Growers' Association under domestic US trade law.
Back in 1994-95, the same corporate complainant overtly sought sanctions against the EU, Costa Rica and Colombia for their discriminatory banana trading practices.
The USA has a completely tariff- and quota-free market for the fruit, and Washington appears to believe that this is the direction in which the EU should move too. This is more or less the public position of the four major dollar zone companies. However, privately, they may admit to preferring to secure a 'reasonable share' of a higher-priced EU market, maybe with a simpler tariff quota for all imports, for example. If there is still good money to be made from a trade in licences, then maybe a licence system is not so bad for business after all!
The implications of all this recent history for the scope of the WTO process will be analysed in due course. But the real balance of power between its member governments, the private sector and civil society should now be clear to weaker member governments and their citizens alike.
The initial reaction of the most affected Caribbean governments and marketing companies was to call for a boycott of the ruling. An extended waiver for the Lome Convention in the WTO seems now to be the preferred position. However, the European Commission was quick to say that it intended to comply fully with the dispute ruling and its recommendations; in other words, reform the banana import regime. Significantly for the Caribbean governments involved, the British government was also quick to say that it would support compliance with the ruling.
On 25th September, the EU formally accepted the report. On 16th October, the EU stated that it will comply with the ruling. Most observers agree that the EU should have a new regime in place by January 1999.
ACP and the EU, that Colombia (and other countries which had signed the Framework Agreement) were prepared for a free market, but "it also has to be fair for everybody". It is unclear what this means, especially since the Costa Rican position is not in favour of complete liberalisation.
Windward Islands: one conclusion of a high-level Summit on 10-11th September in Dominica was that: "effective protection guaranteed by Lome must stay". St. Vincent's Prime Minister Mitchell denounced US pressure, and heavily criticised the WTO. Another main conclusion was that the "Certified Farmer Programme" must be implemented in order for the industry to compete in the long term.
Meanwhile, farmers are busy organising for a 'fair trade' initiative in the British market. At a seminar organised by regional farmers' association WINFA in August, there was widespread support for 'fair trade' as central to a survival strategy.
What the WTO condemns:
# The system of import licences and the division according to operator categories or type of activity, in particular the allocation of 30% of the tariff quota to category B operators;
# The administration of the tariff quota for third countries being more complex than for ACP quota - the two quotas (ACP and third country) should be treated identically;
# The 'Framework Agreement' on bananas and, in particular, the allocation of a part of the tariff quota to Venezuela and Nicaragua, given that neither had a 'substantial interest' in EU banana trade;
# The possibility of quota re-allocation between signatories of the 'Framework Agreement';
# The issuing of export certificates for countries who signed the Framework Agreement and the exemption from these certificates for category B operators;
# The non-traditional volume of 90,000 tonnes allocated to the ACP and taken out of the tariff quota;
# The system of compensation for losses for climatic damage to Community and ACP producers (via the allocation of import licences - the so-called 'hurricane licences').
What the WTO does not condemn:
# The ACP tariff preference, and duty free entry;
# The division of the traditional ACP quota (whilst stating that these were set subject to the limits placed under the Lome Convention).
What the WTO did not examine:
# The majority of internal measures including the national preference, the financial support system, the domestic quota;
# The level of the third country tariff quota (2.2 million tonnes) and the ACP quota (857,700 tonnes).
Source: Fruitrop/ClRAD-FLHOR, Paris, 9/97
|