Trade in Bananas: Commission Proposes Support Package for ACP Producers' Competitiveness

The measures will focus on three goals: boosting the banana sector's competitiveness, promoting economic diversification and addressing broader social, economic and environmental impacts.

18 Mar 2010 --- The European Commission has adopted a €190 million support package for banana exporters from African, Caribbean and Pacific (ACP) states. This proposal was part of the historic Geneva Agreement on Trade in Bananas. The EU concluded this deal with Latin American countries and the US in December 2009 which settles 15 years banana disputes. It also cuts the tariff which the EU applies to bananas imported from Latin American countries. Today's measures aim to support ACP banana exporters to adjust to this new trading environment, taking into account each country's specific situation. The measures will focus on three goals: boosting the banana sector's competitiveness, promoting economic diversification and addressing broader social, economic and environmental impacts.

European Commissioner for Development Andris Piebalgs stated: "These measures will help ACP countries to adapt to the new realities of the banana trade regime. The Commission has committed itself to fully stand by ACP countries to foster their efficient integration into the world economy while respecting international trade rules. This package delivers on that commitment."

European Commissioner for Trade Karel De Gucht said: "The Geneva Agreement on bananas achieved the best possible outcome for all involved. It guarantees ACP producers' preferential access to the EU market. It settles long-running trade disputes, bringing stability to the bananas industry, which potential investors look for. And today the Commission has fulfilled its pledge to propose substantial financial aid to help ACP banana-exporting countries adjust."

In December 2009 the EU agreed to gradually cut its import tariff on bananas from Latin America from €176 per tonne to €114. In response, the US agreed to settle its related WTO dispute with the EU. With those two agreements, years of lengthy and complex negotiations where put to an end. At the same time, to help ACP banana exporters, the Commission agreed to adopt a proposal for a €190 million support package. Today's proposal concerns the ten main ACP banana-exporting countries: Belize, Cameroon, Côte d'Ivoire, Dominica, Dominican Republic, Ghana, Jamaica, Saint Lucia, Saint Vincent and the Grenadines and Suriname. The proposal is to source these funds from the Community budget. Over the period 2010-13, the €190 million "Banana Accompanying Measures" (BAM) will be in addition to development aid from the European Development Fund.

These measures will provide financial support for:
• investments in competitiveness improvement;
• economic diversification policies;
• broader social, economic and environmental impacts

Beneficiary countries' adjustment will vary, depending on the importance of the banana sector and their ability to adapt. With additional efforts, some countries will remain competitive and others may have to opt for other solutions. The actual measures will be country-specific, identified and prepared by ACP countries in coordination with the EU within wider agriculture and development strategies.

In addition, ACP bananas countries will continue to enjoy duty- and quota-free access to the EU under separate trade and development agreements, the so-called Economic Partnership Agreements (EPAs). The Commission will now submit its proposal to the EU's decision-making bodies, the Council and the European Parliament.