EU Banana Tariff Irks Chiquita

BRUSSELS - Nov 29/05 - SNS -- The European Union will impose an import tariff of euro 176 per metric ton (MT) on January 1 to all countries enjoying Most Favoured Nation status. The new import regime will also include a duty-free annual import quota of 775,000 MT for ACP bananas.

The changes, which will see the tariff applied to Latin American bananas disappointed Chiquita Brands International, Inc., one of the world's largest banana trading companies.

"Chiquita regrets that the European Commission has advanced a tariff proposal that will be bad for banana producers and will introduce a number of clear World Trade Organization violations that have previously been condemned," said Fernando Aguirre, chairman and chief executive officer.

The European Commission's two earlier proposals for a tariff-only regime -- first at euro 230 MT and later at euro 187 MT -- were rejected by a panel of WTO arbitrators earlier this year because they would not have resulted in "at least maintaining total market access" for Latin American producers.

The company noted that many Latin American-producing countries have already protested the WTO-illegality of the new proposed measures and have made clear they would not agree to waive those illegalities. Those countries have repeatedly warned the European Commission that any increased banana tariff would create complications in the WTO Hong Kong talks to be held in December. They have also informed the European Commission that special WTO expedited procedures would be invoked immediately to help block these illegal measures from taking effect.

"If a revision of this regime is ratified, the euro 176 MT tariff, which is more than double the current tariff of euro 75, would impose an additional $375 million tax burden on the European banana trade each year and would increase tariff costs on bananas imported by Chiquita by approximately $110 million per year," Aguirre said.

"The latest plan has been rejected by the majority of stakeholders in the global banana trade, including most Caribbean and Latin American banana-producing nations. It would place enormous pressure on Latin American banana producers, who would ultimately bear a major part of the cost of this increased tariff and access discrimination.

"A destabilized European community banana market would also impact European community banana subsidies. Numerous producing and marketing interests, including most Caribbean countries, have called for a transitional regime to prevent these disruptive market consequences."