STATEMENT ISSUED BY THE TWENTY-SEVENTH MEETING OF THE COUNCIL FOR TRADE AND ECONOMIC DEVELOPMENT (COTED) ON THE LATEST DEVELOPMENT IN RESPECT TO THE DISPUTE OVER THE EUROPEAN BANANA REGIME

Trade Ministers of the Caribbean Community (CARICOM), at the 27th Meeting of the Council for Trade and Economic Development, May 14-15, 2009, expressed concern at the latest proposals by the European Union (EU) for new tariff measures to deal with the longstanding banana dispute.

Ministers urged the EU to act in accordance with its commitments under successive partnership agreements with the ACP and the CARIFORUM/EC Economic Partnership Agreement (EPA), which require the EU to avoid drastic and rapid cuts in favor of MFN producers. They emphasized that the EC proposal to reduce the already lowered MFN tariff of 176 Euros to 136 Euros per tonne by 2011, falling to a floor of 114 Euros per tonne by 2016, would seriously damage regional production and export to the EC Market and would exacerbate the economic and social conditions, particularly at a time when the global financial and economic crisis is impacting these economies and which will have long-lasting deleterious effects. They further stressed the vital importance of the banana export sector to the livelihood of thousands of families in many small and vulnerable CARICOM Countries.

Ministers underlined that the prospect of even further tariff reductions in the context of the EC negotiations with the Central American countries is cause for alarm.

CARIFORUM producers are committed to modernizing the sector and to improving their economies in partnership with the EU. Ministers reminded the EU of the provisions of Article 42 of the EPA, which commits the EC to maintain for as long as is feasible, significant preferential access for traditional agricultural exports from the CARIFORUM countries.

Ministers expressed dissatisfaction with the 110 million Euro financial package proposed by the European Commission, which falls far short of ACP estimates of the losses to be incurred. Furthermore, the EC offer does not take into account the resources needed to support improving cost efficiencies, sector diversification as well as the support to redeployment to alternative non-banana activities. Ministers therefore urged the EU to take the full scope of their ACP partners’ needs into account in fashioning the financial package, which should be additional to already programmed EDF resources. Further, the financial package should contain discrete allocations for the Caribbean, and be structured in such a way as to allow for speed and flexibility of disbursement.

The Ministers have therefore called on the EC to revisit the pace and depth of the proposed reductions in the MFN tariff rates and to reconsider the package of support for adjustment in the ACP banana producing states thereby reinforcing the principles of partnership established in the CARIFORUM-EC EPA and the Cotonou Agreement of 2000.