Proposal for a Regulation of the European Parliament and of the Council repealing Council Regulation (EC) No 1964/2005 on the tariff rates for bananas
Date: 2010-03-17
Institutions: European Commission
Subjects: ACP countries, CCT duties, import, originating product, tariff quota, tariff reduction, tropical fruit

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EUROPEAN COMMISSION 

Brussels, 17.3.2010 
COM(2010)96 final 

2010/0056 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

repealing Council Regulation (EC) No 1964/2005 on the tariff rates for bananas 

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EXPLANATORY MEMORANDUM 

Council  Regulation  (EEC)  No  404/93  of  13  February  1993  established  a  common 
organisation  of  the  market  in  bananas  in  the  European  Communities.  After  the  adoption  of 
this Council Regulation, several Latin American WTO Members supplying bananas to the EU 
on  a  Most  Favoured  Nation  basis  as  well  as  the  United  States  initiated  WTO  dispute 
settlement  proceedings  against  the  EU  (notably  the  longstanding  dispute  WT/DS27)  with 
respect to the different treatment of bananas introduced into the European Union market by 
different suppliers. 

On  11  April  2001  and  on  30  April  2001,  respectively,  the  Commission  reached 
Understandings  with  Ecuador  and  the  United  States  which  set  the  conditions  to  resolve  the 
disputes.  Those  Understandings  envisaged  the  introduction  of  a  'tariff  regime  only'  for  the 
imports of bananas in 2006. On 14 November 2001, the WTO Doha Ministerial Conference 
adopted  waivers  from  the  EU  obligations  under  Articles  I  (Doha  Waiver)  and  XIII  of  the 
GATT  regarding  the  preferential  treatment  granted  to  products  of  ACP  origin  under  the 
Cotonou Agreement. Those waivers established as a condition for the waiver with respect to 
bananas  that  the  new  tariff  only  regime  to  be  introduced  in  2006  "would  result  in  at  least 
maintaining  total  market  access  for  MFN  banana  suppliers"  and  provided  for  an  arbitration 
mechanism in case of disagreement. 

On 12 July 2004, the Council authorised the Commission to open negotiations under Article 
XXVIII of the General Agreement on Tariffs and Trade 1994 ("GATT 1994") with a view to 
introducing a tariff only regime for bananas in the EC schedule. Accordingly, the Community 
notified the WTO on 15 July 2004 of its intention to modify concessions on item 0803 00 19 
(bananas) in the EC WTO Schedule (CXL). Negotiations were conducted by the Commission 
in consultation with the Committee established by Article 133 of the Treaty and the Special 
Committee  on Agriculture  and  within the framework of  the negotiating directives issued by 
the Council. These negotiations failed to lead to an agreement. 

On  31  January  2005  the  Community  notified  the  WTO  of  its  intention  to  replace  its 
concessions  on  item  0803 00 19  (bananas)  with  a  bound  duty  of  €230/tonne.  On  30  March 
2005 several WTO Members (Brazil, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, 
Nicaragua,  Panama  and  Venezuela)  requested  arbitration  under  the  Doha  waiver.  The 
Arbitrator’s Award issued on 1 August 2005 concluded that the MFN tariff rate of €230/tonne 
proposed by the Community was not consistent with the conditions of the Doha Waiver. The 
Commission revised the Community proposal in light of the arbitrator’s findings. In a second 
arbitration  award,  issued  on  27  October  2005,  the  Arbitrator  concluded  that  the  revised 
proposal for an MFN tariff rate of €187/t onne also failed to rectify the matter. 

In  view  of  its  obligation  to  introduce  a  tariff  only  regime  by  1  January  2006,  and  in 
consideration of the lack of agreement on a bound duty, the EU introduced an applied MFN 
duty  of  €176/tonne  through  Council  Regulatio n  (EC)  No  1964/2005.  This  regulation  also 
opened an autonomous tariff quota of 775 000 tonnes net weight subject to a zero-duty rate 
for  imports  of  bananas  originating  in  ACP  countries.  The  EU  did  not  notify  any  further 
proposal  to  modify  its  tariff  schedule  on  bananas,  pending  an  agreement  with  MFN  banana 
suppliers. 

Since 1 January 2008, ACP banana suppliers have enjoy duty-free quota-free access to the EU 
market on the basis of Economic Partnership Agreements with the EU. 

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On  23  February  2007  and  on  29  June  2007,  respectively,  Ecuador  and  the  United  States 
requested  the  establishment  of  a  panel  pursuant  to  Article  21.5  of  the  WTO  Dispute 
Settlement Understanding concerning the alleged inconsistency with the WTO agreements of 
measures  adopted  by  the  EU  to  comply  with  the  WTO  Dispute  Settlement  Body  (DSB) 
reports  in  the  dispute  WT/DS27.  The  final  reports  were  adopted  by  the  DSB  in  December 
2008. The report in the case brought by Ecuador stated that the EU applied tariff (€176/tonne) 
on bananas was inconsistent with the EU tariff bindings under GATT 1994. Both reports also 
ruled  that  the  preference  granted  by  the  EU  at  the  time  of  the  establishment  of  the  panel 
(775 000 tonnes duty free) was inconsistent with the GATT 1994. 

On 22 March 2004 and on 29 January 2007 the Council authorised the Commission to open 
negotiations  under  Article  XXIV:6  of  the  GATT  1994  in  the  course  of  the  accession  to  the 
European Union of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the 
Republic  of  Latvia,  the  Republic  of  Lithuania,  the  Republic  of  Hungary,  the  Republic  of 
Malta,  the  Republic  of  Poland,  the  Republic  of  Slovenia,  the  Slovak  Republic  and  the 
Republic of Bulgaria and the Republic of Romania, respectively. 

The  negotiations  under  Article  XXVIII  and  Article  XXIV:6  of  the  GATT  1994  were 
successfully concluded on 15 December 2009 by the initialling of a "Geneva Agreement on 
Trade  in  Bananas"  with  Brazil,  Colombia,  Costa  Rica,  Ecuador,  Guatemala,  Honduras, 
Mexico,  Nicaragua,  Panama,  Peru  and  Venezuela  ("the  Geneva  Agreement")  and  of  an 
"Agreement  on  Trade  in  Bananas"  with  the  United  States  of  America  (the  "EU/US 
Agreement"). 

The agreements negotiated by the Commission provide for the settlement of the claims of the 
countries  concerned  under  Articles  XXIV:6  and  XXVIII  of  the  GATT.  In  addition,  they 
implement the Understandings by binding a 'tariff regime only' and provide a solution to all 
the  pending  disputes  concerning  the  tariff  treatment  of  bananas,  which  should  therefore  be 
formally settled upon certification of the new EU tariff schedule on bananas. 

With  the  Geneva  Agreement  entering  into  force,  it  is  therefore  necessary  to  abolish  the 
existing  applied  EU  MFN  tariff  rate  for  the  importation  of  bananas  by  repealing  Council 
Regulation  (EC)  No  1964/2005  of  29  November  2005  on  the  tariff  rates  for  bananas  which 
established the currently applied rate of €176/tonne. 

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2010/0056 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

repealing Council Regulation (EC) No 1964/2005 on the tariff rates for bananas 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 207(2) thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the proposal to the national Parliaments, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

Council  Regulation  (EC)  No  1964/20051  provides  that  the  tariff  rate  for  bananas  of 
CN code 0803 00 19 is to be EUR 176/tonne as from 1 January 2006. 

On  xx.xx.2010  the  European  Union  signed  the  "Geneva  Agreement  on  Trade  in 
Bananas" with Brazil, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Mexico, 
Nicaragua, Panama, Peru and Venezuela regarding the structure and operation of the 
Union's trading regime for bananas of CN code 0803 00 19 (the "Agreement").  

In  accordance  with  the  Agreement,  the  Union  will  gradually  reduce  its banana  tariff 
from EUR 176/tonne to EUR 114/tonne. A first cut, which was applied retroactively 
as of 15 December 2009, the date of initialling of the Agreement, reduced the tariff to 
EUR 148/tonne. The subsequent cuts are to apply in seven annual instalments with a 
possible  delay  of  a maximum  of two  years  if agreement  on agriculture modalities in 
the Doha Round of the World Trade Organization (WTO) is delayed. The final tariff 
of  EUR  114/tonne  is  to  be  reached  on  1 January  2019  at  the  latest.  The  tariff 
reductions  will  be  bound  in  the  WTO  at  the  moment  of  the  certification  of  the  EU 
banana schedule. 

(4) 

After having been applied provisionally since its date of signature, the Agreement was 
approved by Council Decision …/…/EU2. It entered into force on […]. 

(5) 

As a consequence, it is appropriate to repeal Regulation (EC) No 1964/2005, 

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JO L 316, 2.12.2005, p. 1. 
JO L….. 

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HAVE ADOPTED THIS REGULATION: 

Regulation (EC) No 1964/2005 is repealed. 

Article 1 

This Regulation shall enter into force on [3…]  

Article 2 

This Regulation shall be binding in its entirety and directly applicable in all Member States 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

3 

Date  not  before  date  of  entry  into  force  of  the  Geneva  Agreement  on  Trade  in  Bananas;  to  be 
determined  

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FINANCIAL STATEMENT 

BUDGET HEADING: 
Chapter 12 – Customs duties and other duties  

FichFin/10/50124(DDG/EM/tm)
6.9.2010.1 

DATE: 27/01/2010 
APPROPRIATIONS: 
B2010 : 14.079,7 Mio € 

TITLES: 
Proposal for a Council Decision on the signature and provisional application of a "General Agreement on 
Trade in Bananas" between the European Union and Brazil, Colombia, Costa Rica, Ecuador, Guatemala, 
Honduras, Mexico, Nicaragua, Panama, Peru and Venezuela and of an "Agreement on Trade in Bananas" 
between the European Union and the United States, 
& 
Proposal for a Council Decision on the conclusion of a "General Agreement on Trade in Bananas" between 
the European Union and Brazil, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Mexico, 
Nicaragua, Panama, Peru and Venezuela and of an "Agreement on Trade in Bananas" between the 
European Union and the United States, 
& 
Proposal for a Regulation of the European Parliament and of the Council repealing Council Regulation 
(EC) No 1964/2005 on the tariff rates for bananas 

LEGAL BASIS: 
Treaty on the Functioning of the European Union. Articles 207(4), 218(5)(6) and 207(2). 

AIMS: 
Signature, provisional application and conclusion of two Agreements on Trade in Bananas and repealing 
the regulation on the tariff rates for bananas. 

FINANCIAL IMPLICATIONS 

CHARGED TO THE EC BUDGET 

EXPENDITURE 
- 
(REFUNDS/INTERVENTIONS) 
- 
- 

NATIONAL AUTHORITIES 
OTHER 

PAST 
FINANCIAL 
YEAR 
2009 
(EUR million) 

CURRENT 
FINANCIAL 
YEAR 
2010 
(EUR million) 

- 

- 

FOLLOWING 
FINANCIAL 
YEAR 
2011 
(EUR 
million) 
- 

FOLLOWING 
FINANCIAL 
YEAR 
2012 
(EUR million)

- 

REVENUE 
- 
(LEVIES/CUSTOMS DUTIES) 

OWN RESOURCES OF THE EC  

-3.5 

-74.8 

-88.1 

-106.8 

1. 

2. 

3. 

4. 

5. 

5.0 

5.1 

5.2  METHOD OF CALCULATION: Based on applying the reduced tariff rates on imports of NC Code 

0803.00.19 of the recent 12 months available. 

6.0  CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE 

YES NO 

RELEVANT CHAPTER OF THE CURRENT BUDGET? 

6.1  CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF 

YES NO 

THE CURRENT BUDGET? 

6.2  WILL A SUPPLEMENTARY BUDGET BE NECESSARY? 
6.3  WILL APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS? 

YES NO 

YES NO 

OBSERVATIONS: 

The Agreements reduce progressively the tariff rates for bananas. It can be estimated that these measures 
will lead to smaller own resources which is indicated at point 5.1, net amounts after deduction of 
collecting costs by Member States. (An estimate of the loss of own resources for 2009 was included 
because of the retroactive validity of these Agreements to 15/12/2009). 

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