Jul 21, 1998
PANAMA TO COMPLAIN AGAINST EU OVER BANANAS
Panama City, Jul 19 (IPS/Silvio Hernandez) -- Panamanian legal experts are compiling a dossier to complain against the European Union (EU) for not complying with a World Trade Organization (WTO) ruling against import restrictions on bananas from Latin America.
In late June, EU ministers decided to eliminate licenses for banana imports from Latin America which had operated since July 1993, but they kept the same system of tariffs implemented during that same period.
The EU also kept a quota of 856,000 tons of bananas exempt from tariffs for former European colonies in Africa, the Caribbean and the Pacific, and an 800,000 ton quota for Madeira (Portugal), the Canary Islands (Spain), Guadeloupe and Martinique (France), and Greece.
The tariff system implemented in 1993 authorized the entry of 2.2 million tons of bananas each year from Latin America with a tariff of 72 Ecus (USD 82.50), This amount, however, increases 170 percent once the quota is surpassed.
Import restrictions on Latin American bananas seeks to protect former European colonies and territories that export the crop, which tends to be more expensive and of lower quality than its Latin American counterpart, according to traders here.
Despite ruling of the appellate body of the WTO last year to lift these trade restrictions, the EU is attempting to substitute its current program of quotas and licenses with one which, although nominally different, maintains these discriminatory trade policies, declared Panamanian expert Carlos Ernesto Gonzalez.
Gonzalez, a former Panamanian ambassador to Europe and also a former WTO negotiator, insisted that Panama must take a hard line in the face of the EU's policy.
The former diplomat stated that the new system, to be implemented by the EU in January 1999, seeks to divide the countries which brought the situation to the WTO's attention - namely Panama, Ecuador, Guatemala, Honduras and the United States.
In effect, Panama, along with Ecuador, Costa Rica and Colombia, are part of the group of banana producing countries which the EU considers to be substantial providers of the crop. Bananas from each of these countries account for at least 10% of the total imported by Europe.
Gonzalez recalled that in 1993 the EU also attempted to divide the producing countries when it signed an agreement of preferential treatment with Costa Rica, Colombia, Nicaragua and Venezuela with the intention of breaking up the united front of exporters then represented by the Panama-based Union of Banana Exporting Countries (UPEB).
The UPEB, founded in 1974 in the context of the so-called banana war between producing countries and transnational corporations, includes Colombia, Costa Rica , Guatemala, Honduras, Nicaragua, Venezuela, the Dominican Republic and Panama.
If the six countries that brought complaints against the EU remain united, it is possible that the Europeans would have to reassess their position, he emphasized.
For his part, Panamas Minister of the Treasury Miguel Heras, pointed out that the EUs new banana policy is even more damaging than the old system of quotas and licenses.
The proposed EU policy increases the restrictions and is mechanism to decrease the exports of other banana-producing countries, in violation of the agreements of the WTO and the Uruguay Round, he explained.
The Panamanian government must use all the means at its disposal so that this policy is not maintained, including going before the WTO again, Heras warned.
Gonzalez insisted the country must take a strong position that is coherent with the measures being considered by the United States against the EU, which could even include trade sanctions against European products.
The governments of these countries will have to evaluate if bananas from Caribbean islands are more important that wine or cheese, which nations like France and Spain produce and export in large quantities to the United States, Gonzalez added.
Some 75% of Latin Americas banana trade is in the hands of U.S. transnationals like Chiquita Brands, Castle and Cook (Del Monte) and Standard Fruit Company.
In the case of Panama, the entirety of its banana trade is handled by Chiquita Brands, which also controls 70% of the total output of the country's 15,000 hectares of banana cultivation.
The director of the Panamanian Council for Exterior Commerce, Norman Harris, stated that the countries which brought complaints against the EU have to wait until January 1999, deadline that the WTO set for the EU to change its banana trade policies, to file another complaint.
Nonetheless, he emphasized that Panama is coordinating the next steps with the other affected countries in order to defend a basic crop which, in the case of Panama, constitutions the country's most important export, with yearly revenues nearing USD 180 million per year.