IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

The Tariff-only Import Regime for Bananas in the European Union: Setting the Tariff at Right Level is Impossible Mission

Listed author(s):
  • Guyomard, Herve
  • Le Mouel, Chantal
  • Levert, Fabrice

On 29 November 2005, the European Union (EU) unilaterally introduced a tariff of 176 per tonne to apply from 1 January 2006 to bananas imported from countries enjoying the Most Favoured Nation (MFN) status. The new EU trade policy includes a duty-free annual import quota of 775,000 tonnes for bananas originating from African, Caribbean and Pacific (ACP) states. This regime replaces the very complex and highly contested tariff-rate quota policy in place in the EU between 1993 and 2005. However, the banana international trade war very likely has not come to an end. Several Latin American countries have announced their intention to challenge the new EU trade policy by initiating a new WTO complaint. In this paper, we first propose an analysis of the two WTO arbitration awards that ruled against the initial EU tariff proposals. We show that the arbitrators' awards are incomplete notably because they do not explain why CIF (Cost, Insurance and Freight) import unit values in the EU-15 from MFN suppliers are much higher than FOB (Free on Board) export unit values in corresponding MFN countries adjusted by all relevant costs that should theoretically be added to transform FOB into CIF prices. One plausible explanation to this apparent paradox is that reported CIF prices include at least part of quota rents generated by the tariff-rate quota policy. On this basis, we analyse the impacts of different MFN tariff levels on EU banana imports under contrasting hypotheses regarding, first whether the price gap between CIF and FOB unit values does include at least part of quota rents, second whether banana exports to the EU from Western African ACP countries were constrained under the previous regime where a specific import quota were reserved to ACP countries. We also analyse the consequences of an "augmented" tariff-only import regime including a MFN tariff and a duty-free import quota for ACP bananas.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by International Association of Agricultural Economists in its series 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia with number 25773.

in new window

Date of creation: 2006
Handle: RePEc:ags:iaae06:25773
Contact details of provider: Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

in new window

  1. Swinbank, Alan, 1996. "Capping the CAP? Implementation of the Uruguay round agreement by the European union," Food Policy, Elsevier, vol. 21(4-5), pages 393-407.
  2. S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Multiproduct Firms, Product Differentiation, and Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
  3. Guyomard, Herve & Le Mouel, Chantal, 2003. "The New Banana Import Regime in the European Union: A Quantitative Assessment," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 4(2).
  4. Read, Robert, 2001. "The Anatomy of the EU-US WTO Banana Trade Dispute," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 2(2).
  5. 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.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ags:iaae06:25773. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.