Bridges Weekly Trade News Digest • Volume 10 • Number 15 • 3rd May 2006

New Tropical Products Proposal Angers EU, ACP


Eight Latin American WTO Members have put forward a new proposal seeking the elimination of all duties and quotas on tropical agricultural products. The proposal quickly drew fire from the EU, as well as from several countries that currently benefit from preferential access to the EU market.

According to the July 2004 Framework Agreement (WT/L/579), the "full implementation of the long-standing commitment to achieve the fullest liberalisation of trade in tropical agricultural products [...] is overdue and will be addressed effectively in the market access negotiations."

Bolivia, Colombia, Costa Rica, Ecuador, Guatemala, Nicaragua, Panama and Peru circulated their new proposal on 28 April. In it, they interpreted ‘fullest liberalisation’ to mean the complete, expeditious elimination of tariffs and quotas on tropical products, which they defined as "products growing between the Tropic of Cancer and the Tropic of Capricorn." Furthermore, they argued that no tropical product should be eligible for designation as ’sensitive,’ as this would allow Members to partially shield such products from tariff cuts. The sponsors of the proposal called for identical treatment for ‘alternative products’ which could replace the cultivation of illicit narcotic crops.

The proposal specifically mentions several product categories, including such tariff lines as sugar and bananas, but not rice.

The EU and several African, Caribbean and Pacific (ACP) countries strongly opposed both the proposal’s liberalisation demands as well as its list of products. The EU said that the list could account for up to half of all agricultural products.

Many ACP countries, whose bananas and sugar have preferential access to the EU, would like Brussels to designate tropical products as ’sensitive’ — in direct opposition to the eight Latin American countries. Allowing the EU to retain higher MFN tariffs for these products would enhance the effective value of their trade preferences.

ICTSD reporting.