Season of goodwill?

The Christmas season is supposed to be of “Goodwill to all men”, according to our traditions. There are many in our society, however, who, on the basis of their living experience, must be wondering if it really means “all” men, while countless females cannot help but conclude that women are not so blessed. For this has been a turbulent year for all, save a tiny minority, not just in St. Vincent and the Grenadines, but all around the world as well. It would be superfluous to list the reasons here since the economic gales are buffeting us daily.{{more}}

Needless to say, in an unequal world, some are affected more than others and the capacity to respond to the challenges varies from person to person as it does from sector to sector. Given my own connections, I want to highlight some of the formidable obstacles in the way of the survival of the banana sector. Not just as a matter of bias, but because there are lessons for the rest of the society in it and serious implications for the socio-economic development of the whole country. Those who profess to be “tired” of hearing about banana problems and wish to ignore them might as well get fed up with storm or hurricane warnings during the season of cyclones.

Last week in Barbados, an urgent meeting of CARICOM stakeholders on Bananas was convened. It was the fourth such meeting, yet there ought to have been an even greater urgency, given the perilous situation that could befall Caribbean economies (not just those of banana exporters), should the threats manifest themselves early in the New Year as is quite possible. Two days later, on December 12th, the ACP Working Group on Bananas met in Brussels to discuss similar issues whilst on Monday of this week, just as we were heralding the “Nine Days” before Christmas, an ACP Ministerial meeting on the same subject also took place in Brussels.

Why this flurry of activity at this time? Is it not the old story of banana woes? When will we not just turn that page? If those thoughts are crossing your mind, let me briefly paint the scenario, not out of my head, but by reference to a statement from none other than His Excellently Mr. Gerhard Otmar Hiwat, Ambassador of Suriname in Brussels and Chairman of the Banana Working group of the ACP (African, Caribbean and Pacific) states. Ambassador Hiwat was on December 4th delivering an official ACP Statement on the banana situation to the new Trade Commissioner of the European Commission (EC), Baroness Catherine Ashton.

In that statement, the Ambassador pointed out that

A proposed draft Agreement at the WTO trade talks in July had fallen through because of the failure to give the ACP countries the guarantees they sought to protect their sensitive banana and agricultural sectors.

Agreement had been based on a progressive reduction of the banana tariff on Latin America bananas from the current 176 euros per tonne to 150 from2009, landing at a base of 116 euros per tonne in 2019.

The European Commission persuaded banana-exporting ACP countries that signing the Economic Partnership Agreement (EPA) was the best way to guarantee preferential market access for bananas. The Caribbean has done so and a couple of the African banana-exporting nations have initialed an interim agreement.

Almost before the ink on the Caribbean’s signature had time to dry, the EC entered into negotiations with Latin American nations and put on the table an offer which would lower the banana tariff further than had been rejected by the ACP states at the WTO.

In light of this, the ACP Statement to Baroness Ashton indicated that:

The ACP cannot support tariff levels lower than those proposed in the WTO Draft Agreement.

* Since the reduction (to 95 euros per tonne) proposed by the European Commission means narrowing the ACP preference margin, “the ACP seeks a binding commitment on a EC-funded package of development assistance that would allow ACP banana industries to adjust to the new EC trade regime.”

Such a package is justified on the grounds of (a) being similar to that offered to European Union domestic banana producers such as Martinique and the Canary Islands;(b) the preferential market access given as an incentive for signing the EPA is being eroded even before we can enjoy any EPA benefits; and (c) it is consistent with paragraph141 of the draft WTO Agric modalities of July 10th 2008.

The ACP is seeking an extension of the Special Framework for Assistance (SFA) which is due to end next year to 2013 aimed at supporting both the enhancement of ACP banana competitiveness and at adjustment where producers or industries are unable to survive in the new situation.

That is the context of the trade challenges facing our countries. But it is exacerbated by developments on the market side which I invite you to read along with me in the Christmas issues, even at the risk of spoiling your season of cheer. January is around the corner.

Renwick Rose is a community activist and social commentator.