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Another blow, but no need for panic


Monday’s ruling of the Arbitration Panel, set up by the World Trade Organization (WTO) to examine complaints by nine Latin American nations against the proposal of the European Commission (EC) to change its banana import regime from January 1, 2006, is another blow to our already battered banana industry. However, it is neither unexpected nor fatal and it is important that all concerned view it soberly and constructively.{{more}}

The three-member Panel, following its mandate to the tee, ruled that the European proposal, to replace the current tariff-quota system with a tariff-only system of 230 euros (approximately US$300) per tonne, “would not result in at least maintaining total market access for MFN (that is Latin American) banana supplies”. It therefore upheld the Latins’ objection to the Commission’s proposal and the Commission now has a ten-day period for discussions with the MFN suppliers with a view towards a new proposal. Such a proposal is most likely to be at a lower tariff rate.

Given the fact that for Caribbean producers the 230 euros tariff was itself not enough to guarantee their own market access as future for producers, an even lower rate would be worse.

Further, fears that a removal of the quota would result in cut-throat competition thereby driving down prices below the cost of production, have sound foundation.

Significantly, the Arbitration Panel seemed to pay scant regard to the interests of Caribbean producers. Even though, unlike the previous WTO Disputes Panel, the Caribbean was allowed a formal presentation (with no rebuttal as afforded the Latino), and the Commission made a last-minute proposal to cap duty-free ACP imports, the arbitrators were not inclined to listen to ACP arguments.

So the ruling is against our best interests, once more. The irony of the situation is that the WTO is supposed to give small under developed countries “greater market access” to improve our share of world trade and generally to contribute to raising our living standards and level of development. Every action Vis a Vis the vital banana industry belies this claim.

Where does this leave us then? In the first place it is of utmost importance that we do not panic, not throw up our arms in despair, and not invoke all the doom and gloom. Surely it does not help, but it is neither the first nor perhaps the last WTO ruling against us. We have been hurt by them but we have survived, and by the grace of God, and our own hard work, we will continue to do so.

It means that we must intensify our efforts even further, must cooperate even more closely and must speed up our alternative searches, within and around bananas.

The Fairtrade conversion provides one glimmer of hope, not without its challenges, but opportunities nonetheless.

These we must vigorously pursue even as we avoid negative panic-spreading and uninformed comments.

We need our confidence, our faith and unity in order to succeed.