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Economic Impacts of the New European Banana Market Regime: The Case of Germany / Ökonomische Auswirkungen der neuen Bananenmarktordnung: Das Beispiel Deutschland

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  • Herrmann Roland

    () (Institute of Agricultural Policy and Market Research, University of Giessen, Senckenbergstr. 3, D-35390 Giessen)

Abstract

The objectives of this paper are (i) to assess the actual economic implications of the new European banana policy on prices, consumption and trade in Germany within a theoretical and quantitative analysis; (ii) to elaborate the welfare implications of the European banana market policy on the German banana market from the national compared with the EU’s point of view. The new European banana market policy led to the introduction of a tariff quota system on the formerly unprotected German banana market. This caused a substantial increase in German import prices for bananas, e. g. in 1994 by 95 % compared with the hypothetical situation without trade protection. Further consequences were a strong reduction of import demand and clearly rising import expenditures, by 22 % and 53 % respectively in 1994. The new banana protection on the German market caused substantial losses in consumer surplus: 1039 mill. DM in 1994, as well as deadweight losses. The size of the deadweight losses was clearly higher from the German than from the EU’s point of view. High quota rents of European traders and budgetary gains at the EU level compensated a substantial part of German consumers’ welfare losses at the EU level. This is much less the case for Germany, given the allocation of import licences in the European banana trade and the common financial system in the EU. Strong and untargeted redistributive consequences were induced by the new European banana policy even within the EU.

Suggested Citation

  • Herrmann Roland, 1999. "Economic Impacts of the New European Banana Market Regime: The Case of Germany / Ökonomische Auswirkungen der neuen Bananenmarktordnung: Das Beispiel Deutschland," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 218(1-2), pages 63-84, February.
  • Handle: RePEc:jns:jbstat:v:218:y:1999:i:1-2:p:63-84
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    References listed on IDEAS

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    Cited by:

    1. Osório-Peters, Suhita, 1998. "Die Reform der EU-Marktordnung für Bananen: Lösungsansätze eines fairen Handels unter Berücksichtigung der Interessen von Kleinproduzenten," ZEW Dokumentationen 98-07, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    2. Herrmann, Roland & Kramb, Marc & Mönnich, Christina, 2000. "Tariff rate quotas and the economic impacts of agricultural trade liberalization in the WTO," Discussion Papers 1, Justus Liebig University Giessen, Center for international Development and Environmental Research (ZEU).
    3. Osório-Peters, Suhita, 1998. "The goals of sustainable development and the reform of the EU banana trade regime: a discussion of different trade instruments," ZEW Discussion Papers 98-31, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    4. 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.

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