1. EUROPEAN COMMISSION PROPOSES NEW BANANA REGIME RESPECTING WTO RULES WHILE PRESERVING SUPPORT FOR ACP BANANAS
The European Commission, on Wednesday 14 January, presented revisions it proposes making to its banana regime to make it compatible to WTO rules while safeguarding the interests of the Community producers and the traditional suppliers in the ACP. This reform principally affects the import licences system, concessions made to Latin America banana exporting countries which are signatories to the Framework-Agreement with the EU ( Nicaragua, Venezuela, Costa Rica and Colombia) and access conditions for traditional ACP suppliers. To lessen the impact of the latter the Commission is proposing a technical and financial assistance framework to enable ACP suppliers to improve the competitiveness of their bananas.
A Commission text to be presented formally at the Agriculture Council next Tuesday comprises of the following elements:
1) Preservation of the tariff quota at its present level of 2.2 million tonnes with a duty of 750 ECU per tonne.
2) The setting up of another autonomous tariff quota of 353 000 tonnes with a 300 ECU per tonne tariff quota. (consequence of Austria, Finland and Sweden’s accession to the EU)
3) Abolition of the arrangements governing the allocation of import licenses. A definition will be decided at a later stage after probable guidance from the EU Council. An option being proposed is the Commission distinguishing between traditional operators and newcomers.
4) Granting a specific share of the tariff quota to all suppliers of ‘substantial interest’ while others would have access to the remainder of the quota.
5) Preservation of the guaranteed maximum quantity for ACP suppliers at the current level of 857 700 tonnes with the same zero duty. This guarantee will however no longer be distributed between ACP States individually. According to the Commission this would lead to greater flexibility to traditional ACP suppliers.
6) The abolition of the share (90 000 tonnes) of the tariff quota that was reserved for non traditional ACP suppliers and augmenting the customs duty applicable to their bananas.
The Commission insists that these rectifications will not affect market supply and will have no negative impact on consumers. According to the Commission Latin American banana exporters will benefit from it due to the abolition of import licenses and the Special Export Licences that were reserved for the Latin American signatories to the Framework Agreement. These benefits will allow importers to maintain their current profit margin and consumers to purchase ‘dollar’ bananas ( bananas produced in Latin America by US multinational banana companies) at lower prices
The prospects are less encouraging for traditional ACP suppliers. They will be denied the guarantee of moving their stock and the special system of import licensing allocated to them. No substitution is provided to help their bananas compete with ‘dollar’ bananas. The Commission proposal of a technical and financial assistance framework worth 537.9 million ECU should however help in maintaining their presence in the EU market and adapt to the new market conditions. This assistance will be decided on a case by case basis depending on the competitive condition and restructuring requirements of each ACP supplier.
2. PROPOSAL TO EXTEND TO NINE NON-ACP LDCs A REVISED GSP EQUIVALENT TO ACP TRADE REGIME Experts from the 15 EU Member States will, next week, examine a European Commission proposal to extend access to the EU market for LDCs that are not party to the Lomé Convention. Nine countries proposed to benefit are Yemen Afghanistan, Bangladesh, Laos, Nepal, Bhutan, Kampuchea, Maldives and Burma (despite the latter’s loss of its General System of Preferences, GSP, benefits for political reasons).
The proposal is a response to a EU Council request last June for a 1996 WTO action plan, in favour of LDCs, to be implemented. The Commission proposal revises the GSP regulations by adding the following, to the list of products, that LDCs can benefit from under GSP tariffs: 1) Industrial products covered by the Lomé Convention but not yet by GSP; 2) Agricultural products that are not subject to quotas under the Lomé Convention.
Commission Vice President Mr Manuel Marin, had pointed out that quotas significantly compromise trade preferences. He remarked that in 1996, 99.1% of LDC exports (7.6 million ECU) not covered by GSP were industrial products.
Once the proposal is adopted by the Council (probably in the coming months) it should apply retroactively as from January 1 1998.
3. EP DEVELOPMENT COMMITTEE REPORT INVITES PLENARY TO APPROVE INITIATIVE TO LIGHTEN MULTILATERAL DEBT OF HEAVILY INDEBTED COUNTRIES
Mr Jose Torres Couto MEP (Socialist, Port.) on behalf of the European Parliament EP Development Committee has called on the EP Plenary to adopt an initiative to provide support for structural adjustment and debt relief in heavily indebted ACP countries. Mr Torres Couto welcomed the fact that the need to lighten bilateral debts of ACPs has been officially recognised as going hand in hand with multilateral debt relief. The MEP also called for non-ACPs to be included in a debt relief programme.
A report by Mr Couto, calls for: a) the notion of sustainable debt established by international financial institutions to be based not only on macro-economic indicators but also on human development and social indicators. b) A link to be established between the accomplishment of lasting economic reforms and debt relief. c) ACP countries to compensate for the relief measures granted to them through obligations concerning the environment, the fight against poverty, basic supplies and development projects.
The reports is also in favour of a Commission proposal aimed at setting up a fund administered by the European Investment Bank, EIB, modelled on the fiduciary fund for the most heavily indebted countries. It calls upon the Council to refinance the debt of the countries eligible for debt reductions with the funds disbursed by the reimbursements of former loans.
4. COMMISSION APPROVES FINANCE FOR FOUR HUMANITARIAN PROJECTS IN AFRICA
The European Community Humanitarian Office, ECHO, has approved finances of 6.235 million ECUs for the funding of the following projects in Africa:
1) A 2 million ECU package for a campaign against locusts in Niger, Chad, Cameroon and Nigeria. ECHO will be working in collaboration with COPSE (Italy), CARE (France) and the FAO. 2) A 1.9 million ECU aid package to Sierra Leone for medical and food supplies. Concern Universal UK and Médecins sans frontières (Belgium, Netherlands and France) are among ECHO’s partners in this project. 3) An aid package of 1.9 million to finance the return of refugees to Northern Niger after years of conflict. LVIA (Italy ) and Equilibre (France) are among ECHO’s partners. 4) A package of 525 000 ECU for Somalia to finance a project aimed at providing basic health care and vaccinations. ECHO will collaborate with SOS Kinderdorf (Austria), COSV (Italy) and ADRA (Germany) among others.