EC CURBS ON LATIN AMERICAN BANANAS TO BE CHALLENGED

Jan 29, 1993

EC CURBS ON LATIN AMERICAN BANANAS TO BE CHALLENGED

Bonn/Panama, Jan 21 (IPS) -- Germany will lodge a protest in the European Court of Justice against a plan to restrict sales of Latin American bananas in the European Community (EC) on the grounds this would violate the General Agreement and any Uruguay Round accords.

Meanwhile, according to an IPS report from Panama, in an attempt to head off EC restrictions on banana imports, Latin American governments and growers will seek to coordinate actions in meetings in Mexico and Ecuador.

Experts and businessmen in the field will meet in Tapachula Mexico from Feb. 1-3, while Presidents from the region's banana producing nations will hold a Summit in Guayaquil, Ecuador on Feb. 10.

In December the EC agreed to limit the import of bananas from Latin America to two million tonnes annually. In addition a tariff of 20 percent would be applied. Imports above this quota are subject to further tariffs of as much as 170 percent, starting in July 1993.

In Bonn officials from the German ministries of economy and cooperation have pointed out that they support the free access of Latin American bananas to the single European market.

Representatives of the German government together with members of the Costa Rican delegation accompanying President Rafael Calderon have outlined the economic damage these restrictions would cause to exporters, importers and German consumers.

Klaus-Dieter von Horn, head of the Latin American Department in the German Economy Ministry, said: "We have told the foreign and trade ministers of Costa Rica that we are going to join their fight against this EC decision."

Von Horn said that Bonn would take on their fight by presenting a protest to the European Court of Justice backed by "a legal argument based on two points".

"First, the banana protocol, which is part of the EC Treaty, can only be modified by a unanimous decision of the Community's member states. Therefore, since Germany is against the change, the restrictive agreement adopted by the EC Commission constitutes a violation of the treaty.

"The second point is that approval of this accord by the EC, which is scheduled for March, is against the General Agreement on Tariffs and Trade (GATT)."

Director-General of the German ministry for economic cooperation Bernhard Schweiger, said that the new EC banana protocol "is irresponsible and unacceptable because it goes against all our efforts for the liberation of trade, and contradicts the general lines of our cooperation policy.

"The problem is that Germany, initially backed by Denmark and Holland, has been in a minority in its opposition to restrictions on Latin American bananas. But now that Holland has joined the pro-restriction camp, where France and Spain exercise particular power, our position has become worse," Schweiger added.

According to Jose Joaquin Chaverri, press officer of the Costa Rican foreign affairs ministry and a member of the visiting delegation, "the battle is not lost. This is why Costa Rica is taking international legal action to defend its banana production".

Chaverri pointed out that "in Central America the negative attitude of Holland is being viewed with particular concern, since it is in contrast to the solidarity it maintains with our region through its development cooperation policy".

Chaverri added that Costa Rica "will not negotiate cooperation agreements if there is not a clear political decision against the restrictive laws of the EC".

The United States and Germany are the two main banana importing countries. In Germany in 1991 a total 1.1 billion kilos of bananas were consumed, an achievement which has made the banana a symbol of the reunification of East and West Germany, according to the consulting firm 'El Globus'.

Some 90 percent of the bananas imported into Germany come from Latin America, principally from Ecuador, which exported 358,300 tonnes in 1991, followed by Costa Rica with 341,000 tonnes, according to data by the Federal German Trade Association (AFCA).

Ranking third comes Panama, with 295,500 tonnes exported, followed by Colombia with 248,000 tonnes and fifth Honduras with 65,000 tonnes.

The EC restrictive agreement is intended to protect bananas grown in the ACP countries and in some overseas French and Spanish territories.

Both the forthcoming Mexican and Ecuador meetings are seen as crucial. According to Ricardo Pinzon, "it is imperative that we coordinate a common agenda, much more developed than we have now," so that the banana industry does not suffer the contraction and falling prices of other regional exports, like coffee and sugar.

Pinzon, Panama's alternate representative to the Council of the Union of Banana Exporting Countries (UBEC) and a grower, told IPS that "once again the strategic Latin American banana industry is passing through one of its worst crises, caused by external factors."

Pinzon's views echo the claim of UBEC's Executive Director, Guatemalan Enrique Betancourt, who called the EC measures "unjust, inconsistent, irrational and illegal."

According to Rolando Gabrielli, consultant for the Panamanian banana association, the crisis in the industry is a result of the conflict between US and European transnational to control markets within the "new world order."

"Brussels and Washington, which have great interests in the banana industry, have already begun hand-to-hand combat over the fruits of the labour of Latin American producers and workers, which will lead to greater unemployment and political instability," Gabrielli said.