Opinion of the Economic and Social Committee on the "Proposal for a Council Regulation amending Regulation (EEC) No. 404/93 on the common organisation of the market in bananas"

(2002/C 48/11)

On 14 September 2001 the Council decided to consult the Economic and Social Committee, under Article 37 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 25 October 2001. The rapporteur was Mr Espuny Moyano.

At its 386th plenary session (meeting of 28 November 2001), the Economic and Social Committee adopted the following opinion by 108 votes to two, with two abstentions.

1. Commission proposal

1.1. The Commission's proposed amendments to the Regulation on the common organisation of the market in bananas are mainly designed to implement the second stage of the understandings entered into with the United States and Ecuador on 10 and 30 April 2001 respectively.

1.1.1. These understandings sought to end the EU's banana dispute with the two countries. It was agreed that the Community's arrangements for importing bananas would be adjusted in two stages:

- the first stage entered into force on 1 July 2001 following the adoption of the regulation laying down detailed implementing provisions for the banana import regime; this regulation established a new method of allocating import licences, based on historic reference periods;

- the second stage is due to enter into force on 1 January 2002, with the adoption of the amendments to certain provisions of Council Regulation (EEC) No. 404/93.

1.1.2. The second stage can only enter into force if the WTO grants waivers to Article I (tariff preference for imports from ACP signatories of the Cotonou Agreement) and Article XIII (reservation of a specific quota for ACP bananas) of the GATT Agreement.

1.2. The Commission is also taking this opportunity to update certain obsolete provisions of Regulation (EEC) No. 404/93 concerning:

- the CN codes of the tariff and statistical nomenclature and the common customs tariff;

- the financing of aid for producer organisations;

- the management committee for bananas.

2. General comments

2.1. The Committee recognises the efforts which the Commission has made to reach an understanding with the United States and Ecuador settling the banana dispute and thus suspending the retaliatory measures against EU producers.

2.2. However, the Committee considers that the transfer of 100000 tonnes from quota C to quota B will mean the import of more bananas at a reduced tariff. This is likely to bring down prices and thus adversely affect producer incomes.

2.3. The Committee regrets that the earlier reform of Regulation (EEC) No. 404/93 did not take account of its opinion of 29 March 2000(1) as regards such key issues as:

- opposition to the establishment of a flat tariff system on 1 January 2006, and support for the retention of a non-discriminatory quota system for at least ten years while exploring the possibility of introducing another system at the end of that period. The intervening period could be used to evaluate the impact of the new regime on employment, production structures, producer incomes and market prices in the EU's various producer regions;

- the case for revising the additional quota (quota B) to a more realistic level, in the light of market requirements, so as to avoid both shortages and over-supply;

- the fact that the chosen method for allocating import licences should allow small producers and distributors to enjoy the same market opportunities as the large multinationals. This is necessary in order to offer the consumer a free choice and value for money, while also satisfying health and environmental requirements;

- the need for accompanying measures to cushion the impact which the new import system will have on Community producers;

- the need for special measures to help producers in Somalia, given the political instability in their country which is currently preventing them from exporting their bananas to the EU market on a regular basis.

3. Specific comments

3.1. The Committee recognises that the import arrangements for bananas established in Regulation 404/93 have to be modified in order to comply with the undertakings entered into with the United States and Ecuador. The Committee therefore does not oppose the transfer of 100000 tonnes from quota C to quota B and the reservation of quota C exclusively for ACP bananas.

3.2. The Committee points out that before the current Regulation (EEC) No. 404/93 can be amended, the Community must obtain WTO waivers to Articles 1 and XIII of the GATT Agreement for the period until 2008 (the expiry date of the current arrangements with the ACP countries), as otherwise ACP production would cease to be protected.

3.3. The Committee considers that the successive amendments to the common market organisation for bananas are dismantling the protection offered to Community producers, and that the current legislative framework does not provide the guarantees necessary for the marketing of EU bananas. The Committee therefore thinks that compensatory aid for loss of income should be increased and consolidated in such a way that its operation and cost cannot be called into question by further reforms designed to cut the CAP budget. Such a measure would be justified under Treaty Article 299(2) which provides the legal basis for the establishment of specific conditions for the application of Community policies in the outermost regions.

3.4. The Committee thinks that a clause should be added allowing producer Member States voluntarily to limit the production of bananas eligible for compensatory aid to areas that are planted with bananas at the time when the decision is adopted. The aim of this would be to protect traditional producers in areas where productivity is low but where banana growing plays an important environmental role; these producers may be more affected by the possible apportionment of aid if the maximum guaranteed global and regional quota is exceeded. Also, some of the new plantations are more intensive, which could adversely affect the upkeep of the environment.

3.5. The Committee wishes to point out a mistake in the figures contained in the financial statement appended to the Commission proposal. Deducting the new customs duties (EUR 7,5 million) from the customs duties lost (EUR 20,8 million), obviously yields a net figure of EUR 13,3 million, and not the EUR 15,3 million mentioned in the Commission document.

4. Conclusions

4.1. The Committee acknowledges the need to adapt the banana import system laid down in Regulation (EEC) No. 404/93 in order to settle the banana dispute at the WTO and thus also end the retaliatory measures taken by the United States against certain EU imports.

4.2. The Committee reiterates that this adjustment to the common organisation of the market in bananas, although necessary, must not jeopardise the efficiency of the system or its basic objectives and, in particular, retention of the marketing guarantee for Community and ACP bananas, providing an adequate income for producers and giving consumers throughout the EU access to a reasonably priced and varied range of bananas from different regions.

Brussels, 28 November 2001.

The President

of the Economic and Social Committee

Göke Frerichs

(1) OJ C 140, 18.5.2000.