CARICOM STATEMENT ON THE EU BANANA IMPORT REGIME ISSUED BY THE 10TH MEETING OF THE COUNCIL FOR TRADE AND ECONOMIC DEVELOPMENT (COTED).

The Tenth Meeting of the Council for Trade and Economic Development (COTED) which was convened in Georgetown, Guyana, 11-12 January 2001 is dismayed at the decision of the Agriculture Council of the European Union to direct the Commission to prepare for a revised EU banana import regime based on the principle of "First Come, First Served" (FCFS).

The proposal is totally inconsistent with the EU commitment under the Cotonou Agreement of last February "aimed at ensuring the continued viability of (ACP) banana export industries and the continuing outlet for their bananas on Community market." The Commission's proposals would, on the contrary, lead to the total destruction of the Caribbean banana industry with resultant severe economic and social damage and dislocation.

The Cotonou Agreement is intended to ensure both continued access and a viable return. The FCFS proposal provides neither. ACP Bananas will have no guarantee of entry to the market in any week. This system will turn the banana trade into a lottery for Caribbean growers, with the odds stacked against them and in favour of the dominant dollar traders. The Caribbean and indeed the small banana growers cannot afford such a gamble.

If the EU were to opt for an FCFS based system then it must include appropriate provisions to ensure access and a viable return for the ACP. The Caribbean banana exporting countries have offered to the Commission several approaches to achieve a mutually acceptable solution. The onus is now on the EU to find the means of implementing its Treaty obligations to the ACP in letter and spirit.

CARICOM Governments note that the EU's comprehensive Proposals on Agriculture, tabled in the World Trade Organisation, reaffirm the commitment of the EU to rendering preferential regimes for developing countries secure, stable and predictable. The proposed FCFS runs counter to these objectives, making the entire system of preferences for bananas unstable, unpredictable and highly insecure.

The most effective means to ensure access is through an appropriate tariff quota allocated primarily on the basis of past trade. CARICOM notes with deep disappointment the failure of EU/US negotiations on such a solution.

CARICOM is not in a position to apportion blame for this failure, but notes with regret that the stance recently taken by the USA has not taken account of the needs of the Caribbean industry accord with understandings previously reached. In light of the repeated assurances given by the US to representatives of the Caribbean, at all levels, it is difficult to believe that the US would seek to sacrifice the vital Caribbean banana trade for narrow corporate interests.

CARICOM strongly urges that negotiations be resumed between the EU and the US and indeed with other key interested parties in a constructive spirit. CARICOM cannot accept a system that does not ensure continued access to the EU market on an economically viable basis.