The European parliament on Wednesday (Oct 22) overwhelmingly approved the appointment of British Baroness Catherine Ashton as the European Commissioner in charge of trade. In a plenary session in Strasbourg, 538 MEPs voted for the new Commissioner for European trade policies. There were 40 votes against her appointment and 63 abstentions.
Ashton was nominated earlier this month by the British government to succeed Peter Mandelson, following his appointment to the British government.
The President of the European Commission and the Council - the institution that regroups the Member states - having already given the green light for the appointment of the first woman commissioner for trade, it remained only for parliament to vote.
On Tuesday (Oct 21), Ashton had a three-hour hearing in parliament during which she was tested on trade. She is now a member of the European Commission in her own right till the European elections due in June 2009 when a new Commission will be appointed.
During the hearing in parliament, MEPs posed questions to the commissioner-designate and she showed good knowledge of her new trade portfolio. In particular, Ashton, who is an economist by training, was asked about the ongoing financial crisis, future of the Doha Round and its overtaking by the bilateral trade negotiations.
With a short time to prepare as a result of the fast-tracking of the approval process, the Commissioner got praise from the European law-makers. Spanish MEP Ignasi Guardans, vice-President of the parliament trade committee said, "in her responses to some tough and often highly politicised questioning, she demonstrated strong political skills and composure which is evidence of good negotiating skills."
“The committee had some natural concerns about her lack of direct experience of international commerce or foreign affairs but with such a short time to prepare, she persuaded the committee that she understood the link between trade and the impact on the European small and medium sized business sector and jobs,” Guardans added.
After the approval by the parliament, she said she would pay her first visit to WTO director general Pascal Lamy in Geneva later this week to assure him that pursuing a successful Doha Round remains absolutely central to Europe’s trade policy.
Responding to the confirmation of Ashton as new trade commissioner, Benedict Southworth, Director of the World Development Movement, said: “The European Commission needs to radically overhaul its trade policy and Baroness Ashton is now in a unique position to do so. The business-as-usual approach of wholesale deregulation and trade liberalisation is out of step with today’s climate of global financial, food and energy crises.”
“Instead, sustainable development and tackling poverty must be at the heart of European trade policy. Baroness Ashton now has an excellent opportunity to draw a line under the past and Commissioner Mandelson’s legacy of unfair trade deals that hit the poorest hardest,” Southworth added.
Showing posts with label WTO. Show all posts
Showing posts with label WTO. Show all posts
Thursday, October 23, 2008
Wednesday, May 28, 2008
India, EU at crossroads
Common values can play catalyst for compatible views
Rising from the ashes of two World Wars and expanding to include 27 Member States with more in the waiting, the European Union today is a bastion of peace, harmony and prosperity. On the other hand, India, with 28 States and seven Union Territories, has emerged over last six decades in a buoyant mood thanks to its democratic principles, freedom of speech and its new found economic strengths.
At The Hague Summit 2004, India and the EU agreed to forge a “Strategic Partnership,” which was a result of an earlier EU publication in December 2003 when the EU published its first-ever security strategy identifying India along with the US, Russia, Japan, China and Canada, as the ones with whom it should develop a “Strategic Partnership,” in order to build an “effective multilateral system leading to a fairer, safer and more United World.”
India, riding on its financial success story, is focusing on greater worldwide visibility, prestige and political clout with a demand for a UN Security Council seat and favourable visa exchange partnerships. In the same vein, the EU wants to use its Strategic Partnership with India, the world’s largest democracy, to meet 21st Century challenges like terrorism, proliferation of Weapons of Mass Destruction (WMDs), failed states and regional conflicts.
For example, the EU expected Delhi with its growing economic ties, to stand up for democracy and human rights during Burma’s military crackdown on dissidents, but Delhi responded saying it does not believe sanctions work. There will always be differences but those as such need not become insurmountable obstacles to building a deeper and wider relationship.
Political ties can not go far without financial bonds and a look at the trade figures from recent past show that its time to inject much needed momentum into an uninspiring trade relationship. The trade statistics shifted a gear from a meagre less than five billion Euro in 1980 to a respectable more than 45 billion Euro in 2006. Although trade with the EU is 20 percent of India’s import-export business, making the EU India’s largest trading partner in 2006, India’s share is only 1.8 percent of total EU trade.
In the context of the ongoing negotiations in the EU-India Free Trade Agreement, there are some stumbling blocks that need to be addressed on both sides. According to reliable sources, the major hurdle is in the fields of agriculture which is a protected sector in the EU which earmarks 40 percent of its total budget to this sector where there are subsidies galore.
The EU has, in recent times, accepted the fact that Indian import tariffs have been substantially reduced but it complains they are still high by international standards. The EU calls it a “complex and non-transparent” system as it points at additional duties, taxes, and charges that are levied on top of the basic customs duties.
Pointing to the “non-tariff” barriers, the EU lists quantitative restrictions, mandatory testing, import licensing, certification for a large number of products and a complicated procedural modus operandi as the major speed breakers for a smooth trade relationship. With Indians finding the EU institutions bewildering and complex, India has its own set of complaints, foremost being in recent times the frequent use of anti-dumping duties on its exports including footwear.
The OECD (Organization for Economic Cooperation and Development) in a recent report highlighted the need for India to go for tough and bold reforms in opening its economy more rapidly to international trade and FDI (Foreign Direct Investment) by loosening service sectors like insurance and retailing, while India argues it has liberalised the FDI regime considerably.
The figures are still disappointing, as in recent years the FDI flow to India from the EU has been a paltry less than two percent of the total FDI outflow from the EU.Climate Change is another major sticking factor in the relationship equation, as India negates EU calls for a stricter binding commitments to reduce greenhouse gas emission, while Delhi argues that as a developing country it can not be expected to slow down its pace of industrialisation.
The EU has allotted 470 million Euro between 2007-2013 to tackle cooperation in the energy sector and environmental concerns while making efforts to reach its Millennium Development Goals.Doha is another word that sends alarm bells ringing in Delhi and Brussels as the former has failed to soften tough line in the WTO (World Trade Organization) Doha round negotiations refusing to cut industrial tariffs and demanding the EU comes clear on agricultural subsidies.
The global disparity between the South and the North seems to be playing a pivotal role here also. India, along with Brazil and others, has emerged as the leader of the equatorial hunger belt with billions of people and still counting, while the EU with an overaging and ever-decreasing population of the North highlights the threat of this growing southern human avalanche.
With the present stalemate at the Doha Round consultations, it is a miracle of sorts that can revive the Doha Round to the fullest potential as it’s already surviving on life-support devices of optimistic political statements.
The EU and India are together in many global projects, like the European Satellite project “Galileo” which got a goahead last week from the European Parliament, International Thermonuclear Experimental Reactor (ITER) to produce electricity using nuclear fusion, Indian space agency ISRO with its European counterpart ESA.
With the EU-India Free Trade Agreement in the pipeline along with other fields of cooperation being explored, both India and the EU are ready for taking a qualitative leap forward in relations, but the political leaderships on both sides have to transform all the talk of shared values of democracy, diversity and multilateralism into concrete pragmatic actions, thus making an effective and cohesive EU-India Strategic Partnership out of the present patchwork of sectoral cooperation.
Rising from the ashes of two World Wars and expanding to include 27 Member States with more in the waiting, the European Union today is a bastion of peace, harmony and prosperity. On the other hand, India, with 28 States and seven Union Territories, has emerged over last six decades in a buoyant mood thanks to its democratic principles, freedom of speech and its new found economic strengths.
At The Hague Summit 2004, India and the EU agreed to forge a “Strategic Partnership,” which was a result of an earlier EU publication in December 2003 when the EU published its first-ever security strategy identifying India along with the US, Russia, Japan, China and Canada, as the ones with whom it should develop a “Strategic Partnership,” in order to build an “effective multilateral system leading to a fairer, safer and more United World.”
India, riding on its financial success story, is focusing on greater worldwide visibility, prestige and political clout with a demand for a UN Security Council seat and favourable visa exchange partnerships. In the same vein, the EU wants to use its Strategic Partnership with India, the world’s largest democracy, to meet 21st Century challenges like terrorism, proliferation of Weapons of Mass Destruction (WMDs), failed states and regional conflicts.
For example, the EU expected Delhi with its growing economic ties, to stand up for democracy and human rights during Burma’s military crackdown on dissidents, but Delhi responded saying it does not believe sanctions work. There will always be differences but those as such need not become insurmountable obstacles to building a deeper and wider relationship.
Political ties can not go far without financial bonds and a look at the trade figures from recent past show that its time to inject much needed momentum into an uninspiring trade relationship. The trade statistics shifted a gear from a meagre less than five billion Euro in 1980 to a respectable more than 45 billion Euro in 2006. Although trade with the EU is 20 percent of India’s import-export business, making the EU India’s largest trading partner in 2006, India’s share is only 1.8 percent of total EU trade.
In the context of the ongoing negotiations in the EU-India Free Trade Agreement, there are some stumbling blocks that need to be addressed on both sides. According to reliable sources, the major hurdle is in the fields of agriculture which is a protected sector in the EU which earmarks 40 percent of its total budget to this sector where there are subsidies galore.
The EU has, in recent times, accepted the fact that Indian import tariffs have been substantially reduced but it complains they are still high by international standards. The EU calls it a “complex and non-transparent” system as it points at additional duties, taxes, and charges that are levied on top of the basic customs duties.
Pointing to the “non-tariff” barriers, the EU lists quantitative restrictions, mandatory testing, import licensing, certification for a large number of products and a complicated procedural modus operandi as the major speed breakers for a smooth trade relationship. With Indians finding the EU institutions bewildering and complex, India has its own set of complaints, foremost being in recent times the frequent use of anti-dumping duties on its exports including footwear.
The OECD (Organization for Economic Cooperation and Development) in a recent report highlighted the need for India to go for tough and bold reforms in opening its economy more rapidly to international trade and FDI (Foreign Direct Investment) by loosening service sectors like insurance and retailing, while India argues it has liberalised the FDI regime considerably.
The figures are still disappointing, as in recent years the FDI flow to India from the EU has been a paltry less than two percent of the total FDI outflow from the EU.Climate Change is another major sticking factor in the relationship equation, as India negates EU calls for a stricter binding commitments to reduce greenhouse gas emission, while Delhi argues that as a developing country it can not be expected to slow down its pace of industrialisation.
The EU has allotted 470 million Euro between 2007-2013 to tackle cooperation in the energy sector and environmental concerns while making efforts to reach its Millennium Development Goals.Doha is another word that sends alarm bells ringing in Delhi and Brussels as the former has failed to soften tough line in the WTO (World Trade Organization) Doha round negotiations refusing to cut industrial tariffs and demanding the EU comes clear on agricultural subsidies.
The global disparity between the South and the North seems to be playing a pivotal role here also. India, along with Brazil and others, has emerged as the leader of the equatorial hunger belt with billions of people and still counting, while the EU with an overaging and ever-decreasing population of the North highlights the threat of this growing southern human avalanche.
With the present stalemate at the Doha Round consultations, it is a miracle of sorts that can revive the Doha Round to the fullest potential as it’s already surviving on life-support devices of optimistic political statements.
The EU and India are together in many global projects, like the European Satellite project “Galileo” which got a goahead last week from the European Parliament, International Thermonuclear Experimental Reactor (ITER) to produce electricity using nuclear fusion, Indian space agency ISRO with its European counterpart ESA.
With the EU-India Free Trade Agreement in the pipeline along with other fields of cooperation being explored, both India and the EU are ready for taking a qualitative leap forward in relations, but the political leaderships on both sides have to transform all the talk of shared values of democracy, diversity and multilateralism into concrete pragmatic actions, thus making an effective and cohesive EU-India Strategic Partnership out of the present patchwork of sectoral cooperation.
Saturday, April 12, 2008
Focus from seals to humans
Delegation highlights humane, historic side of hunting
Humans risk their lives for their livelihoods since the days of yore and the fact came alive with the death of four seal hunters in the icy North Atlantic waters recently.
While the protesters were trying to find more footage to prove the “inhumane” angle and a Canadian delegation was visiting Europe to nullify those efforts, the accident cut short this year’s hunt for the area of Iles-de-la-Madeleine as hunters left the ice floes out of respect for their lost comrades.
In the comparatively warmer labyrinth of European Union, a delegation from across the Atlantic, led by Loyola Sullivan, Canada’s Ambassador of Fisheries Conservation, argued the case of an “age-old” traditional way of life for seal hunters and the right to selfdetermination.
Echoing the sentiment, Paul Okalik, Premier, Government of Nunavut, told New Europe, “We are here to tell the truth and explain our story. When people open their eyes and ears they will understand that we are doing what every human on earth is doing - earning a living, eating and surviving.”
The visit came in the light of earlier reports that European Commissioner Stavros Dimas was considering a ban on seal products within the EU in the coming months.
Reiterating her earlier comments, Barbara Helfferich, the spokeswoman for commissioner Dimas, told journalists last week, “We are concerned about inhumane hunting of seals. We support sustainable hunting. We are preparing a paper, a communication that takes account of these issues and we hope to have something ready before June or before the summer to be correct.”
Asked to comment on the fact that the Canadian seal hunt is already on and the commission report is not expected before the summer, Helfferich said, “The season for Canada is on. It is limited to particular Canadian quota. Whatever we are doing, we are doing in general, we are not targeting any particular country. So I can not comment on season or not season.”
Confirming the visit of the Canadian delegation she said, “I have nothing more to say on the issue. Mr. Sullivan has been visiting the commission, the cabinet of Commissioner Dimas.”
Lamenting the negative publicity by vested interests, Sullivan told New Europe, “The bad publicity caused by misinformation is of great concern to us. Our job is to correct this misinformation to ensure the public have all the faces on the issue. Unfortunately, this misinformation is driven by various groups who use the seal harvest as a main method of raising money.”
Earlier at a press conference, Sullivan hinted at retaliatory action by Canada within the framework of World Trade Organization (WTO) in case the EU considers ban on seal products, “I believe strongly that there shouldn’t be restrictions on access to markets... The European Commission has an obligation to live up to their commitments. We hope they exercise that right.”
Reflecting on the position of the Canadian government which is taking these EU trade action threats “very seriously,” Sullivan said, “(The Canadian government will defend) the legitimate sustainable, humane, economic activity for some of the most disadvantaged people in our country.”
Challenging the information being churned out by various sources about Canadian seal hunting, Kathy Dunderdale, Minister of Natural Resources, Government of Newfoundland and Labrador said, “We have to keep doing what we’re doing now to ensure that the correct information gets out. We challenge those engaged in the debate to be responsible with regards to their research and to ensure that the information they are putting forward is correct.”
Earlier, one reliable Canadian government source familiar with the hunt had told New Europe, “The recommendations made in the recent report by the European Food Safety Authority (published in December 2007) uphold the legitimacy and humaneness of the hunting practices and techniques that are used, regulated and enforced in Canada’s annual commercial seal hunt. Canada has also supplied information to the authors of a study commissioned by the European Commission on the socio-economic and animal welfare aspects of seal hunting.”
Although Greenland, Norway, Russia and even the EU member state Finland take to seal hunting, it is only Canada’s annual culling of seals which attracts ire of international environmental campaigners and animal protection groups.
Humans risk their lives for their livelihoods since the days of yore and the fact came alive with the death of four seal hunters in the icy North Atlantic waters recently.
While the protesters were trying to find more footage to prove the “inhumane” angle and a Canadian delegation was visiting Europe to nullify those efforts, the accident cut short this year’s hunt for the area of Iles-de-la-Madeleine as hunters left the ice floes out of respect for their lost comrades.
In the comparatively warmer labyrinth of European Union, a delegation from across the Atlantic, led by Loyola Sullivan, Canada’s Ambassador of Fisheries Conservation, argued the case of an “age-old” traditional way of life for seal hunters and the right to selfdetermination.
Echoing the sentiment, Paul Okalik, Premier, Government of Nunavut, told New Europe, “We are here to tell the truth and explain our story. When people open their eyes and ears they will understand that we are doing what every human on earth is doing - earning a living, eating and surviving.”
The visit came in the light of earlier reports that European Commissioner Stavros Dimas was considering a ban on seal products within the EU in the coming months.
Reiterating her earlier comments, Barbara Helfferich, the spokeswoman for commissioner Dimas, told journalists last week, “We are concerned about inhumane hunting of seals. We support sustainable hunting. We are preparing a paper, a communication that takes account of these issues and we hope to have something ready before June or before the summer to be correct.”
Asked to comment on the fact that the Canadian seal hunt is already on and the commission report is not expected before the summer, Helfferich said, “The season for Canada is on. It is limited to particular Canadian quota. Whatever we are doing, we are doing in general, we are not targeting any particular country. So I can not comment on season or not season.”
Confirming the visit of the Canadian delegation she said, “I have nothing more to say on the issue. Mr. Sullivan has been visiting the commission, the cabinet of Commissioner Dimas.”
Lamenting the negative publicity by vested interests, Sullivan told New Europe, “The bad publicity caused by misinformation is of great concern to us. Our job is to correct this misinformation to ensure the public have all the faces on the issue. Unfortunately, this misinformation is driven by various groups who use the seal harvest as a main method of raising money.”
Earlier at a press conference, Sullivan hinted at retaliatory action by Canada within the framework of World Trade Organization (WTO) in case the EU considers ban on seal products, “I believe strongly that there shouldn’t be restrictions on access to markets... The European Commission has an obligation to live up to their commitments. We hope they exercise that right.”
Reflecting on the position of the Canadian government which is taking these EU trade action threats “very seriously,” Sullivan said, “(The Canadian government will defend) the legitimate sustainable, humane, economic activity for some of the most disadvantaged people in our country.”
Challenging the information being churned out by various sources about Canadian seal hunting, Kathy Dunderdale, Minister of Natural Resources, Government of Newfoundland and Labrador said, “We have to keep doing what we’re doing now to ensure that the correct information gets out. We challenge those engaged in the debate to be responsible with regards to their research and to ensure that the information they are putting forward is correct.”
Earlier, one reliable Canadian government source familiar with the hunt had told New Europe, “The recommendations made in the recent report by the European Food Safety Authority (published in December 2007) uphold the legitimacy and humaneness of the hunting practices and techniques that are used, regulated and enforced in Canada’s annual commercial seal hunt. Canada has also supplied information to the authors of a study commissioned by the European Commission on the socio-economic and animal welfare aspects of seal hunting.”
Although Greenland, Norway, Russia and even the EU member state Finland take to seal hunting, it is only Canada’s annual culling of seals which attracts ire of international environmental campaigners and animal protection groups.
EU awaits official WTO ruling
Leaked documents suggest US can impose sanctions
The year 2008 has brought another loss to the European Union in its more than a decade-old tariff dispute with Latin American banana producers and the US, as a leaked interim report from the World Trade Organization (WTO) clearly sided with the US on who can then levy sanctions on European imports equal to damages incurred by US companies.
Have patience, do not react and this too shall pass! The mantra advocated by many in the labyrinths of power in Brussels seems to have slipped badly as 11 years down the road the “Banana Wars” of the late 1990s came back knocking on the doors of the European Commission.
Joining the fray, the US had said in a statement: “The US request relates to the EU’s apparent failure to implement the WTO rulings in a 1996 proceeding initiated by Ecuador, Guatemala, Honduras, Mexico and America.”
After the 1996 WTO ruling, the EU had committed to bring its tariff-quota regime for bananas in compliance with the ruling no later than January 1, 2006, said the US statement, lamenting the fact that “the EU banana regime put in place on January 1, 2006 features a zeroduty tariff quota that is allocated exclusively to bananas from African, Caribbean and Pacific (ACP) countries. Bananas of Latin American origin do not have access to this duty-free tariff rate quota and are subject, instead, to a 176 Euro/ton duty.”
During a press conference later, the European Commissioner for Agriculture and Rural Development Mariann Fischer Boel had wondered why in the first place the US was interested in the banana sector as it is not a banana producer, but then she answered her own doubts with the mention of Chiquita, a major banana company, as the possible cause for US to intervene.
The Commissioner, however, added that the EU will look into the matter and take appropriate steps. Chiquita, based in Cincinnati in the US, could not be contacted for their immediate reaction but it had said in its annual report last year that the tariff added USD 75 million in net costs in 2006.
European banana sector sources told New Europe that other US exporters, including Del Monte and Dole, are also affected, adding that the European Commissioner has her facts correct that no bananas are grown in the US, but in the trade circle of today’s era of globalisation everyone is aware of the large farming interests of these leading world exporters globally, especially in the Latin American region.
The US statement pointed out that WTO ruling had said “the EU’s regime discriminates against bananas originating in Latin American countries and against distributors of such bananas, including several US companies,” adding “The EU was under an obligation to bring its banana regime into compliance with its WTO obligations by January 1999.”
The EU’s tariff-only banana policy took effect in 2006, after a nearly five-year transition from a license-and-quota system that the US and Latin American producers had fought since its introduction in 1993.
The WTO ruled against the old system in 1997 and upheld US sanctions of European goods in 1999.During negotiating for a single tariff system to modify its complex web of duties and quotas for imports, the European Commission had suggested EU duties of 230 Euro and then scaling them down to 187 Euro, but WTO panels had rejected the proposals arguing that those were discriminatory against Latin American (Latam) nations.
Out of that deadlock emerged the figure of 176 Euro, but the conflict simmered on.Even after the introduction of the new EU single tariff system, there was widespread dissatisfaction, and Norwegian Foreign Minister Jonas Gahr Stoere got into the driver’s seat to find a political solution based on a thorough monitoring of the EU banana imports and various price systems in force.
But, after waiting nearly for a year, Ecuador decided to go ahead with the WTO route culminating in a victory late last year. On November 23, 2006 Ecuador was joined by Colombia as a third party. Panama and the US followed and more countries are set to join in the fray according to sector insiders.
The EU’s current banana import policy significantly differentiates access treatment as a tariff-quota volume of 775,000 tonnes is exclusively reserved for bananas of ACP origin. ACP bananas within the quota enter duty-free (i.e., at a 176 Euro/tonne margin of preference), with unlimited ACP over-quota access authorised at a tariff of 176 Euro/tonne.
On the other hand, an “autonomous” tariff of 176 Euro/tonne (a rate more than double the previously-applicable rate of 75 Euro/tonne) applies to all other bananas.Bananas are the most important agricultural product in Ecuador, and its exports account for 25 percent of all Ecuador’s agricultural exports. Some 22 percent of all banana output is aimed for the European Union market but this share to EU 27 today is down by 3.3 percent.
On the other hand, in Europe it is a “sensitive” commodity and there is a protection regime for the sector.While bananas grown within the bloc have shrunk to only 11 percent of the total EU supply, highly-subsidised production is important to the Spain’s Canary Islands, the French overseas departments of Martinique and Guadeloupe and Portugal’s Madeira and Azores islands.In 2007, Europeans ate some 4.9 million tonnes of bananas, making the bloc the world’s biggest banana market but consumption per capita remains two kilogrammes below the average consumed in the US.
Over two-thirds of the fruits consumed come from Latin America, earning a total of approximately 637 million Euro in tariffs for EU coffers and a further “duty-free” 16.3 percent from Africa and Caribbean countries.
It’s interesting to note that only on Colombian bananas is there a taxation of 200 million Euro, and social pundits along with market observers agreed that this money could be utilised to aid rural communities, such as Colombia, where former presidential candidate and Colombian-French citizen Ingrid Betancourt is kept as a hostage.
Bananas are set to be prominent in the upcoming finalisation of Association Agreements with Central American and Andean countries while appearing on the radar of WTO Development Round but according to reliable WTO sources in Geneva, the latest leaked ruling can be appealed against by the European Union only when these are finalised and published.
The year 2008 has brought another loss to the European Union in its more than a decade-old tariff dispute with Latin American banana producers and the US, as a leaked interim report from the World Trade Organization (WTO) clearly sided with the US on who can then levy sanctions on European imports equal to damages incurred by US companies.
Have patience, do not react and this too shall pass! The mantra advocated by many in the labyrinths of power in Brussels seems to have slipped badly as 11 years down the road the “Banana Wars” of the late 1990s came back knocking on the doors of the European Commission.
Joining the fray, the US had said in a statement: “The US request relates to the EU’s apparent failure to implement the WTO rulings in a 1996 proceeding initiated by Ecuador, Guatemala, Honduras, Mexico and America.”
After the 1996 WTO ruling, the EU had committed to bring its tariff-quota regime for bananas in compliance with the ruling no later than January 1, 2006, said the US statement, lamenting the fact that “the EU banana regime put in place on January 1, 2006 features a zeroduty tariff quota that is allocated exclusively to bananas from African, Caribbean and Pacific (ACP) countries. Bananas of Latin American origin do not have access to this duty-free tariff rate quota and are subject, instead, to a 176 Euro/ton duty.”
During a press conference later, the European Commissioner for Agriculture and Rural Development Mariann Fischer Boel had wondered why in the first place the US was interested in the banana sector as it is not a banana producer, but then she answered her own doubts with the mention of Chiquita, a major banana company, as the possible cause for US to intervene.
The Commissioner, however, added that the EU will look into the matter and take appropriate steps. Chiquita, based in Cincinnati in the US, could not be contacted for their immediate reaction but it had said in its annual report last year that the tariff added USD 75 million in net costs in 2006.
European banana sector sources told New Europe that other US exporters, including Del Monte and Dole, are also affected, adding that the European Commissioner has her facts correct that no bananas are grown in the US, but in the trade circle of today’s era of globalisation everyone is aware of the large farming interests of these leading world exporters globally, especially in the Latin American region.
The US statement pointed out that WTO ruling had said “the EU’s regime discriminates against bananas originating in Latin American countries and against distributors of such bananas, including several US companies,” adding “The EU was under an obligation to bring its banana regime into compliance with its WTO obligations by January 1999.”
The EU’s tariff-only banana policy took effect in 2006, after a nearly five-year transition from a license-and-quota system that the US and Latin American producers had fought since its introduction in 1993.
The WTO ruled against the old system in 1997 and upheld US sanctions of European goods in 1999.During negotiating for a single tariff system to modify its complex web of duties and quotas for imports, the European Commission had suggested EU duties of 230 Euro and then scaling them down to 187 Euro, but WTO panels had rejected the proposals arguing that those were discriminatory against Latin American (Latam) nations.
Out of that deadlock emerged the figure of 176 Euro, but the conflict simmered on.Even after the introduction of the new EU single tariff system, there was widespread dissatisfaction, and Norwegian Foreign Minister Jonas Gahr Stoere got into the driver’s seat to find a political solution based on a thorough monitoring of the EU banana imports and various price systems in force.
But, after waiting nearly for a year, Ecuador decided to go ahead with the WTO route culminating in a victory late last year. On November 23, 2006 Ecuador was joined by Colombia as a third party. Panama and the US followed and more countries are set to join in the fray according to sector insiders.
The EU’s current banana import policy significantly differentiates access treatment as a tariff-quota volume of 775,000 tonnes is exclusively reserved for bananas of ACP origin. ACP bananas within the quota enter duty-free (i.e., at a 176 Euro/tonne margin of preference), with unlimited ACP over-quota access authorised at a tariff of 176 Euro/tonne.
On the other hand, an “autonomous” tariff of 176 Euro/tonne (a rate more than double the previously-applicable rate of 75 Euro/tonne) applies to all other bananas.Bananas are the most important agricultural product in Ecuador, and its exports account for 25 percent of all Ecuador’s agricultural exports. Some 22 percent of all banana output is aimed for the European Union market but this share to EU 27 today is down by 3.3 percent.
On the other hand, in Europe it is a “sensitive” commodity and there is a protection regime for the sector.While bananas grown within the bloc have shrunk to only 11 percent of the total EU supply, highly-subsidised production is important to the Spain’s Canary Islands, the French overseas departments of Martinique and Guadeloupe and Portugal’s Madeira and Azores islands.In 2007, Europeans ate some 4.9 million tonnes of bananas, making the bloc the world’s biggest banana market but consumption per capita remains two kilogrammes below the average consumed in the US.
Over two-thirds of the fruits consumed come from Latin America, earning a total of approximately 637 million Euro in tariffs for EU coffers and a further “duty-free” 16.3 percent from Africa and Caribbean countries.
It’s interesting to note that only on Colombian bananas is there a taxation of 200 million Euro, and social pundits along with market observers agreed that this money could be utilised to aid rural communities, such as Colombia, where former presidential candidate and Colombian-French citizen Ingrid Betancourt is kept as a hostage.
Bananas are set to be prominent in the upcoming finalisation of Association Agreements with Central American and Andean countries while appearing on the radar of WTO Development Round but according to reliable WTO sources in Geneva, the latest leaked ruling can be appealed against by the European Union only when these are finalised and published.
Tuesday, November 13, 2007
Banana sector gets slippery
Judgment day arriving as industry awaits Kroes’ moves
Investigations take time and when it comes to investigating in environs full of banana peels, the going gets slippery, slowing down proceedings further. There was, however no slip last week on the part of Jonathan Todd, commission spokesman for competition commissioner Neelie Kroes as he told journalists, “Anti-trust inquiry is ongoing.”
Todd was replying to a question about the latest status of a “cartel probe” launched two years ago into a suspected cartel of banana wholesalers. In 2005, Kroes team had raided the offices of Europe’s largest fruit distributors after Chiquita, the world’s biggest producer of bananas blew the whistle on an alleged cartel in the European banana markets.
At the time, Fyffes of Ireland, Dole and Del Monte of the US had admitted that they had been among the targets of the raids while the European commission had confirmed the “unannounced inspections” at the premises of several producers and distributors of bananas and pineapples in Germany, Belgium, the United Kingdom and Ireland.
“The Commission has reason to believe that the companies concerned may have violated Article 81 of the EC Treaty, which prohibits price fixing and market sharing practices,” the commission statement had said clarifying that raids did not mean that the targeted companies are guilty adding that a full-scale inquiry would be carried out.
The investigation was launched at the instance of Chiquita, based in Cincinnati in the US when it had it had informed the EU competition authorities after the management became aware that several of its employees had been sharing price information with rival companies for “many years.”
Commenting on the inquiry, reliable sources in the European commission and European banana industry sector told New Europe that the regulators are targeting the five biggest banana companies – Chiquita, Del Monte and Dole of the United States, plus Noboa of Ecuador and Fyffes of Ireland for an illegal cartel activity.
The sources also confirmed recent media reports that at the end of two years the European commission has more concrete information and formal charges may be initiated before the end of the current year.
Although Commissioner Kroes has broken many records during her tenure for imposing fines on cartels, the market observers feel that the fines, if imposed may stay within the precedent cases of about 10 percent of annual sales. Moreover, it may take months before the case comes to an end as the accused firms would have several months time period to defend themselves.
One market pundit alleged that the timing is coinciding with the ongoing transatlantic banana war which got reignited last year when Ecuador was joined by the US, Columbia and Panama to open another tug-of-war a decade later.
December 15, 2006 saw the first day of the proceedings at Geneva of revival of the “1990s banana wars” with the then-winner Ecuador coming back to haunt the European Union. Ecuador, the world’s largest banana exporter, complained to the WTO against the EU’s single tariff of 176 Euro that came into force on January 1, 2006, terming it “high.”
Last year, while negotiating for a single tariff system to modify its complex web of duties and quotas for imports, the European Commission had suggested EU duties of 230 Euro and then scaling them down to 187 Euro, but WTO panels had rejected the proposals arguing that those were discriminatory against Latin American (Latam) nations. Out of that deadlock emerged the figure of 176 Euro, but the conflict simmered on.
Even after the introduction of the new EU single tariff system, there was widespread dissatisfaction, and Norwegian Foreign Minister Jonas Gahr Stoere got into the driver’s seat to find a political solution based on a thorough monitoring of the EU banana imports and various price systems in force.
But, after waiting nearly for a year, Ecuador decided to go ahead with the WTO route and on November 23, 2006 was joined by Colombia as a third party. Panama and the US followed and more countries are set to join in the fray according to sector insiders.
The EU’s current banana import policy significantly differentiates access treatment as a tariff-quota volume of 775,000 tonnes is exclusively reserved for bananas of ACP origin. ACP bananas within the quota enter duty-free (i.e., at a 176 Euro/tonne margin of preference), with unlimited ACP over-quota access authorised at a tariff of 176 Euro/tonne. On the other hand, an “autonomous” tariff of 176 Euro/tonne (a rate more than double the previously-applicable rate of 75 Euro/tonne) applies to all other bananas.
Bananas are the most important agricultural product in Ecuador, and its exports account for 25 percent of all Ecuador’s agricultural exports. Some 97 percent of all banana output is aimed for the European market. On the other hand, in Europe it is a “sensitive” commodity and there is a protection regime for the sector.
While bananas grown within the bloc account for only 16 percent of the total EU supply, production is important to the Spain’s Canary Islands, the French overseas departments of Martinique and Guadeloupe and Portugal’s Madeira and Azores islands.
Europeans eat some 4.6 million tonnes of bananas every year, making the bloc the world’s biggest banana market. Over two-thirds of the fruits consumed come from Latin America and a further 17 percent from Africa and Caribbean countries.
Written for New Europe, the European Weekly on June 16, 2007 - Issue : 734
Investigations take time and when it comes to investigating in environs full of banana peels, the going gets slippery, slowing down proceedings further. There was, however no slip last week on the part of Jonathan Todd, commission spokesman for competition commissioner Neelie Kroes as he told journalists, “Anti-trust inquiry is ongoing.”
Todd was replying to a question about the latest status of a “cartel probe” launched two years ago into a suspected cartel of banana wholesalers. In 2005, Kroes team had raided the offices of Europe’s largest fruit distributors after Chiquita, the world’s biggest producer of bananas blew the whistle on an alleged cartel in the European banana markets.
At the time, Fyffes of Ireland, Dole and Del Monte of the US had admitted that they had been among the targets of the raids while the European commission had confirmed the “unannounced inspections” at the premises of several producers and distributors of bananas and pineapples in Germany, Belgium, the United Kingdom and Ireland.
“The Commission has reason to believe that the companies concerned may have violated Article 81 of the EC Treaty, which prohibits price fixing and market sharing practices,” the commission statement had said clarifying that raids did not mean that the targeted companies are guilty adding that a full-scale inquiry would be carried out.
The investigation was launched at the instance of Chiquita, based in Cincinnati in the US when it had it had informed the EU competition authorities after the management became aware that several of its employees had been sharing price information with rival companies for “many years.”
Commenting on the inquiry, reliable sources in the European commission and European banana industry sector told New Europe that the regulators are targeting the five biggest banana companies – Chiquita, Del Monte and Dole of the United States, plus Noboa of Ecuador and Fyffes of Ireland for an illegal cartel activity.
The sources also confirmed recent media reports that at the end of two years the European commission has more concrete information and formal charges may be initiated before the end of the current year.
Although Commissioner Kroes has broken many records during her tenure for imposing fines on cartels, the market observers feel that the fines, if imposed may stay within the precedent cases of about 10 percent of annual sales. Moreover, it may take months before the case comes to an end as the accused firms would have several months time period to defend themselves.
One market pundit alleged that the timing is coinciding with the ongoing transatlantic banana war which got reignited last year when Ecuador was joined by the US, Columbia and Panama to open another tug-of-war a decade later.
December 15, 2006 saw the first day of the proceedings at Geneva of revival of the “1990s banana wars” with the then-winner Ecuador coming back to haunt the European Union. Ecuador, the world’s largest banana exporter, complained to the WTO against the EU’s single tariff of 176 Euro that came into force on January 1, 2006, terming it “high.”
Last year, while negotiating for a single tariff system to modify its complex web of duties and quotas for imports, the European Commission had suggested EU duties of 230 Euro and then scaling them down to 187 Euro, but WTO panels had rejected the proposals arguing that those were discriminatory against Latin American (Latam) nations. Out of that deadlock emerged the figure of 176 Euro, but the conflict simmered on.
Even after the introduction of the new EU single tariff system, there was widespread dissatisfaction, and Norwegian Foreign Minister Jonas Gahr Stoere got into the driver’s seat to find a political solution based on a thorough monitoring of the EU banana imports and various price systems in force.
But, after waiting nearly for a year, Ecuador decided to go ahead with the WTO route and on November 23, 2006 was joined by Colombia as a third party. Panama and the US followed and more countries are set to join in the fray according to sector insiders.
The EU’s current banana import policy significantly differentiates access treatment as a tariff-quota volume of 775,000 tonnes is exclusively reserved for bananas of ACP origin. ACP bananas within the quota enter duty-free (i.e., at a 176 Euro/tonne margin of preference), with unlimited ACP over-quota access authorised at a tariff of 176 Euro/tonne. On the other hand, an “autonomous” tariff of 176 Euro/tonne (a rate more than double the previously-applicable rate of 75 Euro/tonne) applies to all other bananas.
Bananas are the most important agricultural product in Ecuador, and its exports account for 25 percent of all Ecuador’s agricultural exports. Some 97 percent of all banana output is aimed for the European market. On the other hand, in Europe it is a “sensitive” commodity and there is a protection regime for the sector.
While bananas grown within the bloc account for only 16 percent of the total EU supply, production is important to the Spain’s Canary Islands, the French overseas departments of Martinique and Guadeloupe and Portugal’s Madeira and Azores islands.
Europeans eat some 4.6 million tonnes of bananas every year, making the bloc the world’s biggest banana market. Over two-thirds of the fruits consumed come from Latin America and a further 17 percent from Africa and Caribbean countries.
Written for New Europe, the European Weekly on June 16, 2007 - Issue : 734
Interview with Jean Lemierre, President, EBRD
On the sidelines of attending “The European Bank for Reconstruction and Development: Focus on Eastern and South Eastern Europe,” an event organised last week at the Parliamentary Assembly of Council of Europe, Jean Lemierre, President of the EBRD spoke to Tejinder Singh (Tito) about the EBRD’s expanding role with a new policy to go further east and south in a changing world since its inception in 1991 when communism was crumbling in central and eastern Europe and ex-soviet countries needed support to nurture a new private sector in a democratic environment.
Q: With a “no-dividend” policy for 2006 although mentioning record profits, how strong is the EBRD position to expand its business?
A: The decision to put all of the profits for 2006 into reserves was fully consistent with the new strategy for the bank unveiled in May 2006 which foresees a shift in the bank’s activities further east and south and the assumption of greater risks. The bank needs these reserves in order to prepare for possible greater risks as we increasingly step up the pace of our investments, especially in the former Soviet Union and in the Balkans. Business volume in 2006 was 4.9 billion Euro and we expect roughly the same magnitude of investment in 2007.
Q: What is your opinion on how best to use the profits?
A: The final decision on the use of the profits will ultimately be taken by our shareholders but the debate on how to allocate income started at our Annual Meeting in Kazan this year. This issue needs a thorough debate and the discussions will continue until our next Annual Meeting in Kiev in 2008. There are three options under consideration. In addition to adding further to reserves there will be the option of using funds to support the bank’s activities, in areas such as providing technical assistance, training, supporting nuclear decommissioning projects and also supporting the bank’s activities in promoting energy efficiency. And then there is the option of returning some of the profits to the shareholders. The shareholders will take this decision.
Q: You are extending your role to Balkans and the Commonwealth of Independent States. How far you ready to go in Mediterranean other than EU members?
A: An expansion outside of the current countries of operation is not under discussion.
Q: How soft are the EBRD loans and what kinds of activities are being financed?
A: Not soft at all. The EBRD does not provide soft loans. If it did it would be competing with the private sector which is precisely what the Bank does not do. The bank invests either with loans or with equity stakes, usually in projects where the commercial sector is either not prepared to go at all or not prepared to invest alone. By investing in such projects the EBRD provides what we call “additionality.” The projects are aimed at promoting the process of economic transition, whether by working to improve corporate governance, possibly by taking a seat on a company board, or by helping to develop management or to support efforts to cut energy costs via energy efficiency measures. The bank is active across all sectors. Development of a vibrant financial sector is particularly important to the development of a market economy overall. But we are also active in working on infrastructure projects to help remove the bottlenecks that are obstacles to economic development. And we support private sector industry, either by direct loans or by loans to banks which then act as intermediaries and lend on to micro and small and medium enterprises.
Q: How much does politics play a role in loan dispensing? Does EBRD give any consideration to human rights records of the countries?
A: Politics and human rights do play a role. This is stipulated in Article 1 of the bank’s founding treaty which says the Bank will foster the transition towards open market-oriented economies and promote private and entrepreneurial initiative in countries “committed to and applying the principles of multiparty democracy, pluralism and market economics.” Where this is an issue we restrict our activities largely to investments purely in the private sector. And we also use policy dialogue to help produce positive developments.
Q: What is your vision for EBRD in coming years?
A: The vision is to carry out our role in supporting the further transformation of the economies in the areas where we are active; To see more countries in Europe preparing the way to accession to the European Union and benefiting from that membership; To see other countries increasingly becoming an integral part of the global economy, by joining the World Trade Organisation and playing as an equal partner in the global economic arena; To see in oil and gas rich countries a greater diversification of the economy to build for a sustainable future.
The process of transition has been hard. The collapse of the previous system was a huge shock. The pain endured by many people was great. The vision is also to see all people in the region ultimately benefiting from this huge challenge.
Interview with: Jean Lemierre taken at the end of June 2007 for New Europe, the European Weekly - Issue : 736
Q: With a “no-dividend” policy for 2006 although mentioning record profits, how strong is the EBRD position to expand its business?
A: The decision to put all of the profits for 2006 into reserves was fully consistent with the new strategy for the bank unveiled in May 2006 which foresees a shift in the bank’s activities further east and south and the assumption of greater risks. The bank needs these reserves in order to prepare for possible greater risks as we increasingly step up the pace of our investments, especially in the former Soviet Union and in the Balkans. Business volume in 2006 was 4.9 billion Euro and we expect roughly the same magnitude of investment in 2007.
Q: What is your opinion on how best to use the profits?
A: The final decision on the use of the profits will ultimately be taken by our shareholders but the debate on how to allocate income started at our Annual Meeting in Kazan this year. This issue needs a thorough debate and the discussions will continue until our next Annual Meeting in Kiev in 2008. There are three options under consideration. In addition to adding further to reserves there will be the option of using funds to support the bank’s activities, in areas such as providing technical assistance, training, supporting nuclear decommissioning projects and also supporting the bank’s activities in promoting energy efficiency. And then there is the option of returning some of the profits to the shareholders. The shareholders will take this decision.
Q: You are extending your role to Balkans and the Commonwealth of Independent States. How far you ready to go in Mediterranean other than EU members?
A: An expansion outside of the current countries of operation is not under discussion.
Q: How soft are the EBRD loans and what kinds of activities are being financed?
A: Not soft at all. The EBRD does not provide soft loans. If it did it would be competing with the private sector which is precisely what the Bank does not do. The bank invests either with loans or with equity stakes, usually in projects where the commercial sector is either not prepared to go at all or not prepared to invest alone. By investing in such projects the EBRD provides what we call “additionality.” The projects are aimed at promoting the process of economic transition, whether by working to improve corporate governance, possibly by taking a seat on a company board, or by helping to develop management or to support efforts to cut energy costs via energy efficiency measures. The bank is active across all sectors. Development of a vibrant financial sector is particularly important to the development of a market economy overall. But we are also active in working on infrastructure projects to help remove the bottlenecks that are obstacles to economic development. And we support private sector industry, either by direct loans or by loans to banks which then act as intermediaries and lend on to micro and small and medium enterprises.
Q: How much does politics play a role in loan dispensing? Does EBRD give any consideration to human rights records of the countries?
A: Politics and human rights do play a role. This is stipulated in Article 1 of the bank’s founding treaty which says the Bank will foster the transition towards open market-oriented economies and promote private and entrepreneurial initiative in countries “committed to and applying the principles of multiparty democracy, pluralism and market economics.” Where this is an issue we restrict our activities largely to investments purely in the private sector. And we also use policy dialogue to help produce positive developments.
Q: What is your vision for EBRD in coming years?
A: The vision is to carry out our role in supporting the further transformation of the economies in the areas where we are active; To see more countries in Europe preparing the way to accession to the European Union and benefiting from that membership; To see other countries increasingly becoming an integral part of the global economy, by joining the World Trade Organisation and playing as an equal partner in the global economic arena; To see in oil and gas rich countries a greater diversification of the economy to build for a sustainable future.
The process of transition has been hard. The collapse of the previous system was a huge shock. The pain endured by many people was great. The vision is also to see all people in the region ultimately benefiting from this huge challenge.
Interview with: Jean Lemierre taken at the end of June 2007 for New Europe, the European Weekly - Issue : 736
EU expresses `surprise` as US joins `Banana War`
Have patience, do not react and this too shall pass! The mantra advocated by many in the labyrinths of power in Brussels seems to have slipped badly as eleven years down the road the "Banana Wars" of late 90s are back knocking on the doors of the European Commission. The US, latest to join the fray at World Trade Organisation said in a statement, "The US request relates to the EU's apparent failure to implement the WTO rulings in a 1996 proceeding initiated by Ecuador, Guatemala, Honduras, Mexico and America."
Launching the formal step saying, "We are hopeful that this formal step will facilitate the removal of that discrimination," the US Trade Representative Susan C Schwab added, "We regret that efforts between the EU and its Latin American trading partners to negotiate a solution to the banana issue have not been successful. We share the concern of Ecuador and several other Latin American banana exporters regarding the continued existence of a discriminatory tariff rate quota in the EU's current banana regime."
The US statement pointed out that WTO ruling had said "the EU's regime discriminates against bananas originating in Latin American countries and against distributors of such bananas, including several US companies," adding "The EU was under an obligation to bring its banana regime into compliance with its WTO obligations by January 1999."
After the 1996 WTO ruling, the EU had committed to bring its tariff-quota regime for banana in compliance with the ruling no later than January 1, 2006, said the US statement, lamenting the fact that "the EU banana regime put in place on January 1, 2006 features a zero-duty tariff quota that is allocated exclusively to bananas from African, Caribbean and Pacific (ACP) countries. Bananas of Latin American origin do not have access to this duty-free tariff rate quota and are subject, instead, to a 176 Euro/ton duty."
The European Commissioner for Agriculture and Rural Development Mariann Fischer Boel introduced a personal element of surprise to a more than decade old dispute last week.
Answering a question from New Europe about the new WTO banana dispute with US joining others, the Commissioner wondered why at the first place the US is interested in banana sector as it is not a banana producer but then she answered her own doubts with the mention of Chiquita as the possible cause for US to intervene. The Commissioner however added that the EU will look into the matter and take appropriate steps.
Chiquita, based in Cincinnati in the US could not be contacted for their immediate reaction but European banana sector sources told New Europe that other US exporters including Del Monte and Dole are also affected adding that the European Commissioner has her facts correct that no bananas are grown in the US but in the trade circle of today's era of globalisation everyone is aware of the large farming interests of these leading world exporters globally especially in the Latin American region.
Coming back to the US request to WTO panel to review whether the EU banana import regime breaches the obligations of the international trade body, the EU this week in Geneva as a defending party may veto under WTO rules the request but the WTO will comply with the US request a month later unless the complaint is withdrawn.
The US is following the footsteps of Colombia and Panama which this year decided to follow the beaten track of Ecuador.
December 15, 2006 saw the first day of the proceedings at Geneva of revival of the "1990s banana wars" with the then-winner Ecuador coming back to haunt the European Union. Ecuador, the world's largest banana exporter, complained to the WTO against the EU's single tariff of 176 Euro that came into force on January 1, 2006, terming it "high."
Commenting on the decisions, Michael Mann, European commission spokesman for agriculture had said, "This is very regrettable. We had a consultation process going which we felt was making good progress."Over the past years negotiating for a single tariff system to modify its complex web of duties and quotas for imports, the European Commission, the executive arm of the EU, had suggested EU duties of 230 Euro and then scaling them down to 187 Euro, but WTO panels had rejected the proposals arguing that those were discriminatory against Latin American (Latam) nations. Out of that deadlock emerged the figure of 176 Euro, but the conflict simmered on.
Eurostat data of the first quarter 2007 compared to the same period 2005 made it clear how Latam share compared to ACP banana growing countries is slipping down the banana ladder. The imports of the latter are climbing double as fast as their counterparts in Latin America.The EU's current banana import policy significantly differentiates access treatment as a tariff-quota volume of 775,000 tonnes is exclusively reserved for bananas of ACP origin. ACP bananas within the quota enter duty-free ( i.e., at a 176 Euro/tonne margin of preference), with unlimited ACP over-quota access authorised at a tariff of 176 Euro/tonne.
On the other hand, an "autonomous" tariff of 176 Euro/tonne (a rate more than double the previously-applicable rate of 75 Euro/tonne) applies to all other bananas.Prior to the General Affairs and External Relations Council (GAERC) May 15, 2007, Spain threatened to veto the EU-ACP commitments unless its domestic producers were better protected from an expected rise in banana imports. The fallout was immediately visible when the GAERC endorsed the commission proposal to fully open European to imports from the ACP, with phased-in access for rice and sugar but the banana sector was shelved.
Debating in early December last year in the European Parliament on the need for an assistance to EU farmers, Jean-Claude Fruteau, Member of European Parliament argued, "The assistance provided for banana producers in the EU is necessary in order to compensate for the dysfunctions within the world trade system, in particular the current gap between the social and environmental standards of European countries and those of Central and Latin American countries. To be effective, these internal regulatory measures need to be in line with external regulatory tools by increasing budget allocations as and when any decrease in the customs tariff occurs."
The MEP was pointing to the fact that money coming in through import tariffs goes in to fill the coffers of EU's Common Agriculture Policy (CAP) from where the money goes to EU farmers.Boel had said that the current system of handouts to banana farmers was hard to justify in world trade talks and that it needed to be brought in line with EU agricultural reforms in other sectors.
While bananas grown within the European bloc account for only 16 percent of the total EU supply, production is important to the Spain's Canary Islands, the French overseas departments of Martinique and Guadeloupe and Portugal's Madeira and Azores islands.Europeans eat some 4.6 million tonnes of bananas every year, making the bloc the world's biggest banana market.
Over two-thirds of the fruits consumed come from Latin America and a further 17 percent from Africa and Caribbean countries.To meet all these requests the only way out is to grant duty free quotas to all regions or countries but that seems difficult with the arrival of French President Nicolas Sarkozy for whom the big chunk of winning votes came from French farmers and traders. It may have been a coincidence that Sarkozy went for his post-victory yacht trip with Vincent Bolore whose companies are loading bananas for Europe in Ivory Coast, Ghana and Cameroun.
Written on July 9, 2007 for New Europe, the European Weekly - Issue : 737
Launching the formal step saying, "We are hopeful that this formal step will facilitate the removal of that discrimination," the US Trade Representative Susan C Schwab added, "We regret that efforts between the EU and its Latin American trading partners to negotiate a solution to the banana issue have not been successful. We share the concern of Ecuador and several other Latin American banana exporters regarding the continued existence of a discriminatory tariff rate quota in the EU's current banana regime."
The US statement pointed out that WTO ruling had said "the EU's regime discriminates against bananas originating in Latin American countries and against distributors of such bananas, including several US companies," adding "The EU was under an obligation to bring its banana regime into compliance with its WTO obligations by January 1999."
After the 1996 WTO ruling, the EU had committed to bring its tariff-quota regime for banana in compliance with the ruling no later than January 1, 2006, said the US statement, lamenting the fact that "the EU banana regime put in place on January 1, 2006 features a zero-duty tariff quota that is allocated exclusively to bananas from African, Caribbean and Pacific (ACP) countries. Bananas of Latin American origin do not have access to this duty-free tariff rate quota and are subject, instead, to a 176 Euro/ton duty."
The European Commissioner for Agriculture and Rural Development Mariann Fischer Boel introduced a personal element of surprise to a more than decade old dispute last week.
Answering a question from New Europe about the new WTO banana dispute with US joining others, the Commissioner wondered why at the first place the US is interested in banana sector as it is not a banana producer but then she answered her own doubts with the mention of Chiquita as the possible cause for US to intervene. The Commissioner however added that the EU will look into the matter and take appropriate steps.
Chiquita, based in Cincinnati in the US could not be contacted for their immediate reaction but European banana sector sources told New Europe that other US exporters including Del Monte and Dole are also affected adding that the European Commissioner has her facts correct that no bananas are grown in the US but in the trade circle of today's era of globalisation everyone is aware of the large farming interests of these leading world exporters globally especially in the Latin American region.
Coming back to the US request to WTO panel to review whether the EU banana import regime breaches the obligations of the international trade body, the EU this week in Geneva as a defending party may veto under WTO rules the request but the WTO will comply with the US request a month later unless the complaint is withdrawn.
The US is following the footsteps of Colombia and Panama which this year decided to follow the beaten track of Ecuador.
December 15, 2006 saw the first day of the proceedings at Geneva of revival of the "1990s banana wars" with the then-winner Ecuador coming back to haunt the European Union. Ecuador, the world's largest banana exporter, complained to the WTO against the EU's single tariff of 176 Euro that came into force on January 1, 2006, terming it "high."
Commenting on the decisions, Michael Mann, European commission spokesman for agriculture had said, "This is very regrettable. We had a consultation process going which we felt was making good progress."Over the past years negotiating for a single tariff system to modify its complex web of duties and quotas for imports, the European Commission, the executive arm of the EU, had suggested EU duties of 230 Euro and then scaling them down to 187 Euro, but WTO panels had rejected the proposals arguing that those were discriminatory against Latin American (Latam) nations. Out of that deadlock emerged the figure of 176 Euro, but the conflict simmered on.
Eurostat data of the first quarter 2007 compared to the same period 2005 made it clear how Latam share compared to ACP banana growing countries is slipping down the banana ladder. The imports of the latter are climbing double as fast as their counterparts in Latin America.The EU's current banana import policy significantly differentiates access treatment as a tariff-quota volume of 775,000 tonnes is exclusively reserved for bananas of ACP origin. ACP bananas within the quota enter duty-free ( i.e., at a 176 Euro/tonne margin of preference), with unlimited ACP over-quota access authorised at a tariff of 176 Euro/tonne.
On the other hand, an "autonomous" tariff of 176 Euro/tonne (a rate more than double the previously-applicable rate of 75 Euro/tonne) applies to all other bananas.Prior to the General Affairs and External Relations Council (GAERC) May 15, 2007, Spain threatened to veto the EU-ACP commitments unless its domestic producers were better protected from an expected rise in banana imports. The fallout was immediately visible when the GAERC endorsed the commission proposal to fully open European to imports from the ACP, with phased-in access for rice and sugar but the banana sector was shelved.
Debating in early December last year in the European Parliament on the need for an assistance to EU farmers, Jean-Claude Fruteau, Member of European Parliament argued, "The assistance provided for banana producers in the EU is necessary in order to compensate for the dysfunctions within the world trade system, in particular the current gap between the social and environmental standards of European countries and those of Central and Latin American countries. To be effective, these internal regulatory measures need to be in line with external regulatory tools by increasing budget allocations as and when any decrease in the customs tariff occurs."
The MEP was pointing to the fact that money coming in through import tariffs goes in to fill the coffers of EU's Common Agriculture Policy (CAP) from where the money goes to EU farmers.Boel had said that the current system of handouts to banana farmers was hard to justify in world trade talks and that it needed to be brought in line with EU agricultural reforms in other sectors.
While bananas grown within the European bloc account for only 16 percent of the total EU supply, production is important to the Spain's Canary Islands, the French overseas departments of Martinique and Guadeloupe and Portugal's Madeira and Azores islands.Europeans eat some 4.6 million tonnes of bananas every year, making the bloc the world's biggest banana market.
Over two-thirds of the fruits consumed come from Latin America and a further 17 percent from Africa and Caribbean countries.To meet all these requests the only way out is to grant duty free quotas to all regions or countries but that seems difficult with the arrival of French President Nicolas Sarkozy for whom the big chunk of winning votes came from French farmers and traders. It may have been a coincidence that Sarkozy went for his post-victory yacht trip with Vincent Bolore whose companies are loading bananas for Europe in Ivory Coast, Ghana and Cameroun.
Written on July 9, 2007 for New Europe, the European Weekly - Issue : 737
Monday, November 12, 2007
EU-India dialogue continues
Journalists lament news lost in bureaucratic labyrinth
The European Union, boasting 27 member states and with more lined up to join, has a lot of similarities with India, a federal democracy with 28 states and seven union territories. India was one of the first countries to initiate diplomatic relations with the European Economic Community (EEC) in 1962 and cemented it further with bilateral agreements in 1973 and 1981.
With the ongoing expansion of the EU, the largest financial giant in the world, and the booming economy of India, a nation of over a billion people, there has been no slowdown in the European Union’s role as India’s foremost trading partner and largest foreign internal investor.
The two nations declared on September 7, 2005 at their sixth summit in New Delhi, that they would enhance their ongoing co-operation with the creation of a pragmatic EU–India strategic partnership. According to the European commission declaration, “The action plan covers a wide range of issues grouped under five main chapters:
1. Strengthening dialogue and consultation mechanisms
2. Political dialogue and cooperation
3. Bringing people and cultures together
4. Economic policy dialogue and cooperation5. Developing trade and investment”
In view of these ambitious goals and commitments, it has come as a surprise to Brussels-based journalists that there appears to be a translucent wall shielding information from the media with regard to visits and discussions between these two strategic partners, with the exception of an odd commission press release after the visit is over.
In the latest episode of this ongoing saga, Brussels-based journalists later learned of an official visit to Brussels by an Indian delegation led by Indian Civil Aviation Minister Praful Patel. This information came from a post-visit commission press release, with more details emerging from media reports out of Delhi after the minister’s return to the Indian capital.
Speaking to New Europe, concerned journalists confirmed their lack of any prior knowledge of the visit. There are numerous dialogues, including a bilateral trade agreement and the World Trade Organization (WTO) Doha Round consultations that are being discussed between the European Union and India, and those in the media are voicing concerns of an apparent lack of transparency and availability of information to journalists.
Moreover, it has yet to be explained why the Indian permanent mission to the EU stays tight-lipped about such visits. A recent informal survey of journalists interested in EUIndia relations found that none of the respondents had received any recent emails or other forms of communication from the Indian diplomatic quarters in Brussels regarding the visits or any other ongoing bilateral discussions.
It has been the standard procedure of the European Commission whenever there is a visiting foreign minister from another country, that there is usually a VIP corner (where the commissioner concerned and the visiting dignitaries give a few minutes to the Brussels press corps), if not a full press briefing. Yet somehow, we have yet to see such an opportunity in the recent past when an Indian minister or delegation is visiting.
It seems that the visiting Indian aviation minister did have a fruitful discussion and that an agreement to allow European airlines flying to India to offer multi-modal transport facilities to passengers and vice-versa for Indian air-carriers, may be in the making.
Moreover, the European Commission has been looking forward to acquiring an umbrella agreement for open skies with India, instead of the present bilateral agreements which India has with various EU member states.
Such an agreement will benefit passengers and the citizens of Europe and India. By keeping the press out of the loop, there has been a virtual blackout of these discussions and it seems the press will come to know only when such agreements are finalised and announced in a press release, buried among a plethora of other subjects. Clearly this method provides no opportunity for cross-examination of the pros and cons of the agreement, nor does it allow for discussion to fine tune the negotiations. But the talk of transparency and openness to the European citizens from the European Commission will continue as usual.
There is concern as to the process by which the VIP corners or full press briefings are arranged in the European Commission for the visiting dignitaries. Moreover, there is a consensus among many members of the media that the permanent Indian delegation to the European Union also shoulders some of the responsibility about this lack of availability of information.
On its website, the European Commission announces, “The relationship between India and Europe pre-dates history. Most of Europe owes its linguistic heritage to India — and much of its cultural base … This symbolises the relationship between India and the EU, at one and the same time very old, yet dynamic and entirely modern. Besides the political, economic and trade dialogues which tend to dominate the vision of EU–India cooperation, there is a strong supporting cultural and social interrelationship encompassing many sectors and levels of both societies.”
In view of this statement, there should be a free and frank flow of information to the press corps in Brussels in order to carry the message to the European and Indian citizens, and to strengthen the bonds between the two nations which have existed for centuries, as confirmed by the European commission.
The first ever EU-India Summit was held in 2000 in Lisbon, Portugal and seven years later Portugal again has the EU Presidency, and the opportunity to rekindle these ties, hopefully with much more transparency so that European and Indian citizens can better understand each other’s culture and points of view.
The European Union, boasting 27 member states and with more lined up to join, has a lot of similarities with India, a federal democracy with 28 states and seven union territories. India was one of the first countries to initiate diplomatic relations with the European Economic Community (EEC) in 1962 and cemented it further with bilateral agreements in 1973 and 1981.
With the ongoing expansion of the EU, the largest financial giant in the world, and the booming economy of India, a nation of over a billion people, there has been no slowdown in the European Union’s role as India’s foremost trading partner and largest foreign internal investor.
The two nations declared on September 7, 2005 at their sixth summit in New Delhi, that they would enhance their ongoing co-operation with the creation of a pragmatic EU–India strategic partnership. According to the European commission declaration, “The action plan covers a wide range of issues grouped under five main chapters:
1. Strengthening dialogue and consultation mechanisms
2. Political dialogue and cooperation
3. Bringing people and cultures together
4. Economic policy dialogue and cooperation5. Developing trade and investment”
In view of these ambitious goals and commitments, it has come as a surprise to Brussels-based journalists that there appears to be a translucent wall shielding information from the media with regard to visits and discussions between these two strategic partners, with the exception of an odd commission press release after the visit is over.
In the latest episode of this ongoing saga, Brussels-based journalists later learned of an official visit to Brussels by an Indian delegation led by Indian Civil Aviation Minister Praful Patel. This information came from a post-visit commission press release, with more details emerging from media reports out of Delhi after the minister’s return to the Indian capital.
Speaking to New Europe, concerned journalists confirmed their lack of any prior knowledge of the visit. There are numerous dialogues, including a bilateral trade agreement and the World Trade Organization (WTO) Doha Round consultations that are being discussed between the European Union and India, and those in the media are voicing concerns of an apparent lack of transparency and availability of information to journalists.
Moreover, it has yet to be explained why the Indian permanent mission to the EU stays tight-lipped about such visits. A recent informal survey of journalists interested in EUIndia relations found that none of the respondents had received any recent emails or other forms of communication from the Indian diplomatic quarters in Brussels regarding the visits or any other ongoing bilateral discussions.
It has been the standard procedure of the European Commission whenever there is a visiting foreign minister from another country, that there is usually a VIP corner (where the commissioner concerned and the visiting dignitaries give a few minutes to the Brussels press corps), if not a full press briefing. Yet somehow, we have yet to see such an opportunity in the recent past when an Indian minister or delegation is visiting.
It seems that the visiting Indian aviation minister did have a fruitful discussion and that an agreement to allow European airlines flying to India to offer multi-modal transport facilities to passengers and vice-versa for Indian air-carriers, may be in the making.
Moreover, the European Commission has been looking forward to acquiring an umbrella agreement for open skies with India, instead of the present bilateral agreements which India has with various EU member states.
Such an agreement will benefit passengers and the citizens of Europe and India. By keeping the press out of the loop, there has been a virtual blackout of these discussions and it seems the press will come to know only when such agreements are finalised and announced in a press release, buried among a plethora of other subjects. Clearly this method provides no opportunity for cross-examination of the pros and cons of the agreement, nor does it allow for discussion to fine tune the negotiations. But the talk of transparency and openness to the European citizens from the European Commission will continue as usual.
There is concern as to the process by which the VIP corners or full press briefings are arranged in the European Commission for the visiting dignitaries. Moreover, there is a consensus among many members of the media that the permanent Indian delegation to the European Union also shoulders some of the responsibility about this lack of availability of information.
On its website, the European Commission announces, “The relationship between India and Europe pre-dates history. Most of Europe owes its linguistic heritage to India — and much of its cultural base … This symbolises the relationship between India and the EU, at one and the same time very old, yet dynamic and entirely modern. Besides the political, economic and trade dialogues which tend to dominate the vision of EU–India cooperation, there is a strong supporting cultural and social interrelationship encompassing many sectors and levels of both societies.”
In view of this statement, there should be a free and frank flow of information to the press corps in Brussels in order to carry the message to the European and Indian citizens, and to strengthen the bonds between the two nations which have existed for centuries, as confirmed by the European commission.
The first ever EU-India Summit was held in 2000 in Lisbon, Portugal and seven years later Portugal again has the EU Presidency, and the opportunity to rekindle these ties, hopefully with much more transparency so that European and Indian citizens can better understand each other’s culture and points of view.
Monday, October 15, 2007
Cereals dilemma: space for cereals or for birds
Cereals dilemma: space for cereals or for birds
Following on the heels of the coverage of “Ethanol dilemma: Fuel for vehicles or food for humans” last week on this page, the European Commission proposed to reduce the rate of set-aside of farmland to zero percent for the 2008 harvest year.
With the EU reserves for grain stocks on the low side, the solution was to put all available farmland in production but that did not go down well with wildlife watching organisations and BirdLife International, the global alliance of conservation organisations working together for the world’s birds and people, regretted the decision as the annulment of set-aside for 2008 could deal a severe blow to the already struggling farmland bird populations and other wildlife. The wildlife pundits pointed that the set-aside represents an important refuge for wildlife in intensive farming landscapes.
Speaking to New Europe, one wildlife conservationist wondered how much irreversible harm this rushed decision can do as it was noted that in the past the Commission has recognised the environmental benefits of set-aside and had promised to do a full assessment of it in the upcoming next year’s Common Agricultural Policy “Health Check.”
Moreover, the Spanish portal Eldia.es pointed out that the European Commission is stating that today only 1.7 percent of the cereal production is used for energy products but in reality everywhere in Europe there is a mad rush for development of entirely new plants for biodiesel and ethanol, using crude vegetable oils and grains as raw material. Obviously, the process will lead to a much higher percentage production needed for fuel mixings.
Moreover, a recent report of the OECD has highlighted that the European plans are set to strangle food markets as OECD recommended only three kinds of biofuels as preferable to oil: cane sugar to converted to ethanol, the by-products of paper-making and used vegetable oil and strange but true none of these feature prominently in the EU’s plans for biofuels.
In addition to this, the World Trade Organization is discussing the Brazilian complaint against the US agriculture subsidies including the topic “energy subsidies,” which attacks tax exemptions on diesel fuel and gasoline. With this new set of alcohol-induced WTO battle lines being drawn there will be increasing pressure on the EU and US to open their markets for ethanol.
Overall, the burgeoning ethanol industry is already generating a new wave of prosperity for rural towns around the globe. With major corn farmers pushing for more ethanol production as the industry see the creation of an enormous new market for their crop, giving corn prices the kind of lift they haven’t seen in years.
Last, but not least, there is a slim fallout on the family farmers in developing countries which grow corn and wheat on their 2-3 hectares farmland and they should be the first beneficiaries of the hike in cereal prices and they are worth to be rewarded for their hard labour but the closed markets of the EU and the US need to be opened sooner rather than later.
Following on the heels of the coverage of “Ethanol dilemma: Fuel for vehicles or food for humans” last week on this page, the European Commission proposed to reduce the rate of set-aside of farmland to zero percent for the 2008 harvest year.
With the EU reserves for grain stocks on the low side, the solution was to put all available farmland in production but that did not go down well with wildlife watching organisations and BirdLife International, the global alliance of conservation organisations working together for the world’s birds and people, regretted the decision as the annulment of set-aside for 2008 could deal a severe blow to the already struggling farmland bird populations and other wildlife. The wildlife pundits pointed that the set-aside represents an important refuge for wildlife in intensive farming landscapes.
Speaking to New Europe, one wildlife conservationist wondered how much irreversible harm this rushed decision can do as it was noted that in the past the Commission has recognised the environmental benefits of set-aside and had promised to do a full assessment of it in the upcoming next year’s Common Agricultural Policy “Health Check.”
Moreover, the Spanish portal Eldia.es pointed out that the European Commission is stating that today only 1.7 percent of the cereal production is used for energy products but in reality everywhere in Europe there is a mad rush for development of entirely new plants for biodiesel and ethanol, using crude vegetable oils and grains as raw material. Obviously, the process will lead to a much higher percentage production needed for fuel mixings.
Moreover, a recent report of the OECD has highlighted that the European plans are set to strangle food markets as OECD recommended only three kinds of biofuels as preferable to oil: cane sugar to converted to ethanol, the by-products of paper-making and used vegetable oil and strange but true none of these feature prominently in the EU’s plans for biofuels.
In addition to this, the World Trade Organization is discussing the Brazilian complaint against the US agriculture subsidies including the topic “energy subsidies,” which attacks tax exemptions on diesel fuel and gasoline. With this new set of alcohol-induced WTO battle lines being drawn there will be increasing pressure on the EU and US to open their markets for ethanol.
Overall, the burgeoning ethanol industry is already generating a new wave of prosperity for rural towns around the globe. With major corn farmers pushing for more ethanol production as the industry see the creation of an enormous new market for their crop, giving corn prices the kind of lift they haven’t seen in years.
Last, but not least, there is a slim fallout on the family farmers in developing countries which grow corn and wheat on their 2-3 hectares farmland and they should be the first beneficiaries of the hike in cereal prices and they are worth to be rewarded for their hard labour but the closed markets of the EU and the US need to be opened sooner rather than later.
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