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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

Listed author(s):
  • Anania, Giovanni
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    The EU Common Market Organization for bananas has been generating international controversies since its introduction in 1992. Many thought the 'banana war' had come to an end when, at the 2001 WTO Ministerial Conference in Doha, a Decision was taken for the EU to introduce, no later than 1 January 2006, a 'tariff-only regime' which ' would result in at least maintaining total market access for MFN banana suppliers'. However, proposals by the EU for a tariff-only regime have been rejected in a two-step WTO arbitration in 2005 because they were found not to satisfy this requirement. On 1 January 2006 the EU unilaterally introduced a tariff-only regime. The paper presents the main results of a modelling effort aimed at analyzing this policy issue. The results obtained suggest that: contrary to the decision by the arbitrators, the import regime proposed by the EU in the second step of the arbitration would have satisfied the requirement stated in the WTO November 2001 Decision; moreover, even the higher MFN tariff proposed by the EU in the first step of the arbitration, had it been coupled with a duty-free quota for ACP countries, would have done so. The regime introduced on 1 January 2006 is expected to yield in 2007 MFN banana exports to the EU 400,000 t above those which would have occurred under the previous regime. If a longer time frame is considered, under a tariff-only regime MFN countries will see their exports expand, while the contrary is forecasted under the previous EU import regime.

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    Paper provided by TRADEAG - Agricultural Trade Agreements in its series Working Papers with number 18854.

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    Date of creation: 2006
    Handle: RePEc:ags:tragwp:18854
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    1. Kersten, Lutz, 1995. "Impacts of the EU Banana Market Regulation on International Competition, Trade and Welfare," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 22(3), pages 321-335.
    2. Rikke Thagesen & Alan Matthews, 1997. "The EU's Common Banana Regime: An Initial Evaluation," Journal of Common Market Studies, Wiley Blackwell, vol. 35(4), pages 615-627, December.
    3. S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Multiproduct Firms, Product Differentiation, and Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
    4. 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).
    5. Steve McCorriston, 2000. "Market Structure Issues and the Evaluation of the Reform of the EU Banana Regime," The World Economy, Wiley Blackwell, vol. 23(7), pages 923-937, 07.
    6. Guyomard, Herve & Laroche, Catherine & Le Mouel, Chantal, 1999. "An economic assessment of the Common Market Organization for bananas in the European Union," Agricultural Economics, Blackwell, vol. 20(2), pages 105-120, March.
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