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"
Date: 2001-11-28
Institutions: European Economic and Social Committee
Subjects: Ecuador, United States, World Trade Organisation, import policy, tariff quota, tropical fruit

21.2.2002

EN

Official Journal of the European Communities

C 48/51

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

2. General comments

The Commission’s proposed amendments to the Regu-
1.1.
lation 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.

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

It was agreed that

— 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;

2.1.
The Committee recognises the efforts which the Com-
mission 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
100 000 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.

— 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.

The Committee regrets that

2.3.
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:

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.

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

— 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 CN codes of the tariff and statistical nomenclature

and the common customs tariff;

— 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 financing of aid for producer organisations;

— the management committee for bananas.

(1) OJ C 140, 18.5.2000.

C 48/52

EN

Official Journal of the European Communities

21.2.2002

— 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 arrange-
ments 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 100 000 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 amend-
ments 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

Brussels, 28 November 2001.

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 milli-
on), obviously yields a net figure of EUR 13,3 million, and
not the EUR 15,3 million mentioned in the Commission
document.

4. Conclusions

The Committee acknowledges the need to adapt the
4.1.
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 through-
out the EU access to a reasonably priced and varied range of
bananas from different regions.

The President

of the Economic and Social Committee

Göke FRERICHS