WRITTEN QUESTION E-2433/99

by Ilda Figueiredo (GUE/NGL) to the Commission

(16 December 1999)

Subject: Reform of the banana sector with reference to the WTO panel

At the Council meeting of Agriculture Ministers on 15 November the Commission put forward a proposal for an amendment to the customs arrangements relating to the banana sector. The purpose of the proposal is to put an end to import quotas and to base the arrangements solely on customs duties with effect from 1 January 2006. This is an attempt to bring the banana regime into line with the WTO rules, in response to the criticisms expressed by the USA and the multinational companies which export from the dollar banana area.

Has the Commission carried out any research into the impact which any change in the arrangements would have on Community producers, particularly in view of the fact that there is to be an automatic shift to a scheme based solely on customs duties (which could be reduced as a result of the WTO Millennium Round negotiations)? If such research has been carried out, what were the main findings thereof?

If Community producers suffer any losses, what action is the Commission intending to take in order to compensate them and to provide support for the sector and its future?

Has the Commission carried out any research into the impact which any change in the arrangements would have on ACP producers, particularly in view of the fact that there is to be an automatic shift to a scheme based solely on customs duties?

What action does the Commission intend to propose in terms of cooperation policy and the Community budget in order to compensate ACP producers for their losses?

Answer given by Mr Fischler on behalf of the Commission

(14 January 2000)

The World Trade Organisation (WTO) panel decision did not call into question the Community aid scheme under Commission Regulation (EEC) No 1858/93 of 9 July 1993 laying down detailed rules for applying Council Regulation (EEC) No 404/93 as regards the aid scheme to compensate for loss of income from marketing in the banana sector(1).

The Commission considers that support for Community producers is guaranteed by the current system of compensatory aid, under which the amount fixed for each marketing year corresponds to the difference between the flat-rate reference income (which was increased by 5 % in 1998 and up to 8 % from 1999) and the average prices obtained during the year in which the bananas were marketed. Through providing full compensation regardless of price trends on the Community market, the system thus ensures that Community production is sold. The mechanism's effectiveness was confirmed during 1999, when banana prices on the world market slumped and compensatory aid enabled all Community production to be sold and producers' income to be maintained.

The Commission takes the view that the compensatory aid scheme will absorb the impact, at production level, of the proposed changes.

The financial statement presented with the Commission proposal estimated that its budgetary impact would be to increase expenditure by 77 million and revenue by 30 million. The budgetary impact of applying a system based solely on tariffs cannot be quantified at this stage.

African, Caribbean and Pacific (ACP) producers are already covered by Council Regulation (EC) No 856/1999 of 22 April 1999 establishing a special framework of assistance for traditional ACP suppliers of bananas(2).

The Commission will, in any event, assess whether this support (which has been proposed in the light of the previous changes to the common market organisation) will be sufficient to help traditional ACP suppliers retain their place in the Community market.

(1) OJ L 170, 13.7.1993.

(2) OJ L 108, 27.4.1999.