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EU and Latin America strike deal on trade in bananas
A two decade-long trade dispute of concern to a number of ACP states was resolved in December when the European Union and Latin American countries reached an agreement on the EU’s tariffs on banana exports. The EU has provided preferential access to its market for banana exporters from ACP states, provoking protest from the banana exporting countries in Latin America. Under the pact, the EU will cut its MFN tariff on bananas in eight stages, from the current rate of €176/tonne to €114/tonne in 2017 at the earliest (2019 at the latest), beginning with a €28/tonne cut once the deal is signed by all parties. In turn, Latin American banana producing countries, along with the United States, agree to settle their pending legal disputes against the EU at the WTO. The WTO Dispute Settlement Body has consistently sided with the Latin American countries, which charge that the EU’s tariff regime for bananas is incompatible with WTO rules. The United States has also challenged the EU’s banana tariffs, since many of the largest banana producers operating in Latin America, such as Chiquita, Del Monte and Dole, are headquartered in the US. The EU will provide €200 million to help the main ACP banana-exporting countries adapt to the erosion of their preferential access to the EU market.
Incoming EU trade commissioner sets out priorities for trade policy
The European Union’s trade commissioner-designate, Karel De Gucht, pledged to take an “open and flexible approach” to the EPA negotiations and said concluding the negotiations with the ACP countries should be a top priority for the EU. The remarks came during a three-hour confirmation hearing before Members of the European Parliament. While noting that the EPAs “have come under a lot of criticism, from partner countries as well as civil society in Europe”, he expressed confidence that the agreements “can foster development”. De Gucht, the former Belgium foreign affairs minister, also told EU parliamentarians that he is “quite confident” that a Doha Round trade deal can be struck this year or next. De Gucht added that WTO members have agreed on “90 percent of the topics under negotiation,” and blamed the United States, China and India for the most recent major setback in the talks.
ACP-EU Joint Parliament Assembly adopts resolutions
The ACP-EU Joint Parliament Assembly, meeting in Luanda from 30 November-3 December, adopted resolutions on global governance, reform of international institutions and on the impact of the financial crisis on ACP states.[i] It also adopted the “Luanda Declaration” on the Second Revision of the ACP-EU Partnership Agreement. ACP-EU Co-President Louis Michel also called for additional official development aid to help developing countries combat the food crisis and climate change. Michel also advocated seeking new sources of development policy funding, such as a tax on air fares, and backed the idea of a tax on financial transactions. Finally, this 18th ACP-EU JPA was an opportunity for the Commission to clarify the practical management and implementation details of the €500 million Vulnerability FLEX mechanism, which was adopted in August 2009 as a response to the economic crisis for the most affected ACP countries. Since then, the EC has approved a total of €215 million[ii] under the mechanism.
Publications
Study examines link between EPAs and development
A study published by the German Development Institute assesses the effectiveness of the EU’s effort to link trade and development policy in the context of the EPAs with the ACP countries. The author of the study, Davina Makhan, sets two goals: to analyse the relevance for development of the EU’s trade policy towards the ACP countries; and second, to assess the way the EU has operated as a multilevel system (i.e., one that consists of both the European Community and the individual EU Member States) in the EPA negotiations, in order to draw conclusions on how to strengthen the EU’s capacity to fulfil its international development policies. The study is part of a larger research project funded by the German government that analyses the coherence European development policies in the areas of trade and security.
To view this report in full, see “Linking EU Trade and Development Policies”, available at: http://www.die-gdi.de/CMS-Homepage/openwebcms3.nsf/(ynDK_contentByKey)/ANES-7YUFTE/$FILE/Studies%2050.pdf
Sources:
[i] ACP-EU Joint Parliamentary Assembly texts adopted. http://www.europarl.europa.eu/intcoop/acp/60_18/default_en.htm
[ii] Commission approves € 230 million to cushion the impact of the economic crisis in 13 African and Caribbean countries. !5 December 2009. http://ec.europa.eu/europeaid/documents/aap/2009/pr_aap-spe_2009_ben.pdf
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