Bid to end banana deadlock

Date: 28/09/00

By Simon Taylor

THE European Commission is planning to give banana growers in former EU colonies more time to adjust to a competitive market, delaying the abolition of import quotas until after 2006.

The move is designed to win French and Spanish support for changes to the Union's import rules to end an ongoing trade dispute with the US. The shift in the Commission's stance is aimed at countering Washington's threat to apply €300 million worth of sanctions to a new list of EU exports to try to force concessions from the Union.

Last November, the Commission proposed introducing a tariff-only system in 2006 - ending the guaranteed market access now enjoyed by growers in EU countries' former colonies and overseas territories - as part of a two-stage reform to comply with World Trade Organisation rules.

But Agriculture Com-missioner Franz Fischler and trade chief Pascal Lamy will next week propose postponing the elimination of quotas until after 2006.

Although most member states are keen to find a solution to the dispute, France, Spain and Portugal opposed the Commission's original plan because of its likely impact on growers in their former colonies.

Experts say delaying the move to a tariff-only system would enable the Union to find more cash to compensate vulnerable producers because the current strict ceiling on EU spending expires in 2006.

In return for delaying the switch, the Commission wants member states to support interim reforms which would maintain quotas initially but give companies the right to import bananas on a non-discriminatory basis.

The only way firms can increase their imports now is to pay a high price for additional licences. Under the Commission's 'first-come, first-served' plan, companies would still have to apply for permission to import extra fruit but would not have to pay for the privilege - a system the WTO ruled discriminated in favour of EU operators.

The European Commission is planning to give banana growers in former EU colonies more time to adjust to a competitive market, delaying the abolition of import quotas until after 2006.