EU trade agreement with Central America may force ACP countries out of banana business

posted 19-December-2008

ACP Secretariat | Wednesday, December 17, 2008

EU trade agreement with Central America may force ACP countries out of banana business

The banana companies in African, Caribbean and Pacific (ACP) States maybe forced out of business following the European Union’s decision to negotiate a Free Trade agreement (FTA) with Central American countries in what the ACP Group describes as on “too generous” terms.

The ACP Group expressed shock that only a week after the EU signed the first Economic Partnership Agreement with an ACP region (CARIFORUM), which supposes to secure, and expand preferential access for ACP bananas into the EU market, the EU has gone ahead to negotiate an FTA with the Central Americans in terms which pose serious threat to ACP preferences.

The EU’s market access offer for bananas in the Framework of the FTA under negotiation might include an initial reference import tariff for bananas, which will be lower than the current applied tariff. Also, there will be a rapid decrease over a relatively short period to a final import tariff landing zone, which is lower than the figure that was indicated by ACP countries as the minimum tariff for the necessary preference that would enable them to continue their export of bananas to the EU. The ACP understands that the EU plans to lower the current levy on competing bananas from certain Central America States of 176 euros per tonne to 95 euros over ten years.

source : African Agriculture

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