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Impacts of the EU Banana Market Regulation on International Competition, Trade and Welfare

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  • Kersten, Lutz

Abstract

With the completion of the Single Internal Market, the EU introduced a common market regulation for bananas to replace national banana market policies in member countries. A spatial quadratic programming model is used to quantify the effects of the new regime on production, consumption, the regional structure of international trade, and regional prices and welfare. The results indicate that Latin American exporting countries will lose market share, producers' surplus and export taxes. EU consumers lose US $1.14 billion, of which only 22 percent reaches the beneficiary countries and regions. Roughly 60 percent of the loss in consumers' surplus is shifted to import license holders as a quota rent and less than 15 percent is to be paid as import duty, the rest being deadweight loss. Copyright 1995 by Oxford University Press.

Suggested Citation

  • Kersten, Lutz, 1995. "Impacts of the EU Banana Market Regulation on International Competition, Trade and Welfare," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 22(3), pages 321-335.
    • Handle: RePEc:oup:erevae:v:22:y:1995:i:3:p:321-35
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    Cited by:

    1. Anania, Giovanni & Scoppola, Margherita, 2011. "Assessing the Impact of Trade Policy Changes: Does Market Structure Matter?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114222, European Association of Agricultural Economists.
    2. Borrell, Brent, 1997. "Policy-making in the EU: the bananarama story, the WTO and policy transparency," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 41(2), pages 1-14.
    3. Hervé Guyomard & Nadine Herrard & Catherine Laroche & Chantai Le Mouël, 1997. "L'Organisation commune de marché dans l'Union européenne : impact de la taille du contingent tarifaire appliqué aux bananes dollar et non traditionnelles ACP," Économie et Prévision, Programme National Persée, vol. 127(1), pages 15-32.
    4. Hervé Guyomard & Catherine Laroche & Chantal Le Mouël, 1999. "An economic assessment of the Common Market Organization for bananas in the European Union," Agricultural Economics, International Association of Agricultural Economists, vol. 20(2), pages 105-120, March.
    5. Wilson, John S. & Otsuki, Tsunehiro, 2004. "To spray or not to spray: pesticides, banana exports, and food safety," Food Policy, Elsevier, vol. 29(2), pages 131-146, April.
    6. de Gorter, Harry & Abbott, Philip C. & Barichello, Richard R. & Boughner, Devry S. & Bureau, Jean-Christophe & Choi, Jung-Sup & Coleman, Jonathan R. & Herrmann, Roland & Kramb, Marc Christopher & Shel, 2001. "Issues In Reforming Tariff-Rate Import Quotas In The Agreement On Agriculture In The Wto," Commissioned Papers 14617, International Agricultural Trade Research Consortium.
    7. Anania, Giovanni, 2006. "The 2005 episodes of the "banana war" serial. An empirical assessment of the introduction by the European Union of a tariff-only import regime for bananas," Working Papers 18854, TRADEAG - Agricultural Trade Agreements.
    8. Anania, Giovanni & Scoppola, Margherita, 2014. "Modeling trade policies under alternative market structures," Journal of Policy Modeling, Elsevier, vol. 36(1), pages 185-206.
    9. Anania, Giovanni, 2010. "EU Economic Partnership Agreements and WTO negotiations. A quantitative assessment of trade preference granting and erosion in the banana market," Food Policy, Elsevier, vol. 35(2), pages 140-153, April.
    10. Guyomard, Herve & Laroche, Catherine & Le Mouel, Chantal, 1999. "Impacts of the Common Market Organization for Bananas on European Union Markets, International Trade, and Welfare," Journal of Policy Modeling, Elsevier, vol. 21(5), pages 619-631, September.
    11. Kersten, Lutz, 2004. "Von Quoten zu Zöllen in der EU-Bananenmarktordnung: Auswirkungen auf Welt- und EU-Märkte," Arbeitsberichte aus der vTI-Agrarökonomie 03/2004, Johann Heinrich von Thünen Institute, Federal Research Institute for Rural Areas, Forestry and Fisheries.

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