RESTRICTED EEC - IMPORT REGIME FOR BANANAS

Transcription

1 GENERAL AGREEMENT ON TARIFFS AND TRADE RESTRICTED DS/ February Limited Distribution Original: Spanish E - IMPORT REGIME FOR BANANAS The following information submitted by Colombia, Costa Rica, Guatemala, Nicaragua and Venezuela in the framework of the Director-General's Good Offices is circulated to the contracting parties in accordance with paragraph of the decision on Procedures Under Article XXIII adopted on April (BISD S/). I. INTRODUCTION The banana exporters represented by Colombia, Costa Rica, Guatemala, Nicaragua and Venezuela, on the one hand, and the European Community (), on the other, reached the conclusion that, after two rounds of formal consultations in the framework of the procedure provided for by Article XXII: of the General Agreement, it was not possible to reach a mutually satisfactory agreement with regard to our complaints concerning the 's Banana Import Régimes. In these circumstances, the above-mentioned banana exporters requested the Director-General to use his good offices in an an ex officio capacity, in accordance with the CONTRACTING PARTIES Decision of. Our request was submitted on September. We invoked paragraph of the Decision concerning conciliation procedures under Article XXIII of the General Agreement, in order to display once again our desire to facilitate a satisfactory solution to our complaints, in accordance with the rights and obligations established by the General Agreement. Our Governments formally reserve the right to invoke other provisions of the General Agreement and broaden the legal arguments during the dispute settlement process. II. THE BANANA INDUSTRY IN LATIN AMERICA In the analysis of our complaints against the it is essential to bear in mind that the Latin American exporters are all developing countries, and that some of them are currently experiencing a severe economic crisis. -

2 DS/ Page The following table gives an idea of the importance of the banana industry for our foreign trade, as well as its present dependence on the market. If Latin American exporters that are not GATT contracting parties were taken into account, the importance of the Community market would appear even greater. Banana Exports in Country Total exports (US$ millions) Banana exports (US$ millions) Banana exports Volume of banana % of banana as % of total exports exports to exports (' of. kg. boxes) the E Colombi a Costa Rica Guatemala Nicaragua Venezuela Source: UPEB. The current restrictions, and the clear indications given by the during earlier consultations that it does not intend to dismantle them, have become, for a number of countries, a curb on the development of investment in the industry and hence banana production and marketing. In other countries, such as Venezuela, they jeopardize the country's efforts to expand export opportunities and market diversification. More important still is the impact of the banana industry on employment. The following table shows the volume of employment, both direct and indirect, created by banana production and marketing in our countries in. Bearing in mind that every job created ensures the livelihood of five people on average, we may see that variations in the level of activity of the banana industry affect,, people. Employment in the Banana Industry, Country Total Direct Indirect No. of persons affected Colombia Costa Rica Guatemala Nicaragua Venezuela Total....,...,.,...,,....,,,,. Source: UPEB.

3 DS/ Page The number of people affected amounts to over million if the Latin American exporters still in the process of acceding to the General Agreement are included. In the present economic circumstances, the disturbing employment situation in our countries, in some cases a serious problem, cannot be overlooked. Furthermore, in some countries the employment of women represents more than per cent of total employment created by this activity. Further to these figures, it should be remembered that the dynamism of our banana industry is based on productivity. Nevertheless, its growth potential has been and continues to be seriously affected by the restrictions applied by various member States. There is additional demand for our product access to which has been blocked by means of measures that are in conflict with both the spirit and the letter of the General Agreement. III. DESCRIPTION OF THE VARIOUS RESTRICITONS APPLIED TO BANANAS FROM LATIN AMERICA IN THE MARKET We shall describe below the banana import régimes that are inconsistent with the General Agreement, as well as the provisions that are violated, in particular Articles XI, XIII and Part IV. This brief description provides the facts of the matter and the legal grounds of our complaint, so as to contribute to the Director-General's efforts to use his good offices. It should be pointed out that, apart from a per cent tariff bound in GATT since, the does not have a common import régime for bananas. Instead, there are various complex mechanisms of non-tariff restrictions on imports of this tropical fruit, on which our legal analysis will focus. To use the classification of the, its banana market may be described as follows: open and semi-free market, and protected or closed market. Germany, or open market, is the only member State which applies a tariff-free import régime so that the domestic market can freely determine the origin and quantity of bananas required, which come exclusively from our region. It should also be mentioned that the semi-free market, consisting of Belgium, the Netherlands, Luxembourg, Denmark and Ireland, whose markets are protected only by the per cent GATT bound tariff, are supplied by bananas from our region. Preferential banana imports may enter duty free. The protected or closed market consists of the Community production represented by France (Guadeloupe and Martinique), Spain (Canary Islands), Portugal (Madeira) and Greece (Crete). The remainder consists of Great Britain and Italy, whose market management systems range from "national market organization" to "closed system" or "totally restrictive" for imports, according to the description applied by the Commission.

4 DS/ Page The régimes of France, Spain, Great Britain, Portugal, Italy and Greece are described below, in that order. France The French market is divided in a fixed ratio of two to one, established in, as follows: per cent for the Overseas Departments and the remaining per cent for the ACP countries, whose bananas are not subject to any restrictions or tariff. If demand is not satisfied by these suppliers, the Comité interprofessionnel bananier, requests the Groupement d'intérêt économique bananier to import the balance, with a per cent tariff, from Latin American countries under a system of licences distributed to importers on a pro rata basis in proportion to the imports they effect from the countries other than those of this region. In practice, however, the French market favours the Overseas Departments and some French-speaking ACP countries, with the result that this market is considered practically closed for bananas from our region. This is borne out by the fact that the Commission, in its Regulation of March, considers the French market for bananas as "totally restrictive". Spain The entire Spanish market is reserved for the Canaries. Under Banana Protocol No., signed with its Act of Accession to the, the Spanish Government may impose quantitative restrictions and measures having an equivalent effect on banana imports from third countries until December, unless a unified régime is adopted at Community level before then. Supplies of bananas from the Canary Islands are regulated weekly by the Comision Regional del Plâtano (CREP) which consists of Canary Islands producers and exporters, and the Comision Nacional.de Comercio del Plâtano (CNCP) which co-ordinates and supervises the CREP. Hence, and as import licences for bananas are not granted to any source of supply other than the Canary Islands, in practice this system constitutes an import prohibition on bananas from other areas. Great Britain Imports of bananas from ACP countries enter duty free and in unrestricted quantities. Bananas from our countries are subject to a per cent tariff and import restrictions. These restrictions are The ACP countries' preferential access is based on Protocol V of the Fourth Lomé Convention, Article of the Treaty of Rome and the French Government Decree of March whereby France should not restrict imports from the "Zone France" or former colonies in Africa. See "Customs Notice to Importers" of September. Under Decision C() of June, France may restrict non-preferential banana imports from other member States by means of import licensing. See Ministerial Order of November. See Ministerial Order of March and November. See Decision of June authorizing Great Britain to extend restrictions on bananas from third countries until December.

5 DS/ Page administered by means of licences granted by the UK Banana Trade Advisory Committee. This Committee is made up of the three major importers, two major trade bodies of ACP producers and representatives of the Department of Industry and Trade and Ministry of Agriculture, Forestry and Fisheries. According to market conditions, when demand is not satisfied by preferential supplies bananas may be imported from our countries under import licences issued by the Department of Trade and Industry. This licensing system requires annual authorization by the Commission. Nevertheless, the Commission considers the British banana market as "totally restrictive" owing to the discrimination and restrictions established with regard to bananas from our region. Portugal As in the case of the Spanish market, the Act of Accession of Portugal to the reserves the entire market for Madeira until the conclusion of the accession process in. Nevertheless, since Madeira is not in a position to supply the entire market, Portugal authorizes imports of bananas from our countries under a licensing system and with a per cent tariff, and to a lesser extent from the Canaries. Italy Bananas from ACP countries enter duty free. For other countries, imports are subject to an annual global quota for third countries. This quota is broken down administratively into monthly quantities which are distributed by means of temporary import licences on a "first come, first served" basis. Greece Under Article of the Treaty of Rome, the authorized Greece to suspend the free circulation of bananas within the Community, so as to continue to reserve its market for Crete. This limitation was eliminated in. Since then, discrimination in access has been effected at the border: imports of bananas from ACP countries enter duty free, while bananas from our region are subject to a per cent tariff. In addition, Greece applies a consumption tax that restricts trade in bananas. IV. THE PRESENT REGIMES AND THE GENERAL AGREEMENT Article XI The régimes applied by the, and in particular the restrictions on banana imports, are contrary to Article XI:, which provides that "no prohibitions or restrictions other than duties, taxes or other charges, whether made effective through quotas, import or export licences or other measures, shall be instituted or maintained by any contracting party on the importation of any product...". The systems of de facto prohibition of imports of bananas from our region applied in France and Spain and the import licensing systems in Great Britain, Portugal and Greece, as well as the quotas in Italy, are in breach of this provision of Article XI, which fundamentally and emphatically prohibits such import restrictions. See UK Import Goods (Control) Order (SI /). See Decree-Law /. Official Gazette of December.

6 DS/ Page While there are four basic exceptions to the prohibition on restrictions in Article XI, none of them could serve as a justification for the banana import régimes described above. These exceptions are essentially as follows : Paragraph (a) allows exceptional prohibitions or restrictions "to prevent or relieve critical shortages of foodstuffs or other products essential to the exporting contracting party". In fact, the is an importer of bananas, and therefore this exception does not apply. Paragraph (b) allows import or export prohibitions or restrictions necessary to the application of classification or quality control standards, an exception which has not been invoked by the. Furthermore, technically speaking, bananas from our region are considered to be of higher quality than those produced in the Community or from ACP countries. Paragraph (c)(i) allows restrictions on imports of agricultural products which are necessary to control domestic supply. The does not have a programme to restrict the Community supply of bananas. Paragraph (c)(ii) allows import restrictions to remove "a temporary surplus", which is the opposite of the case of so-called Community production, which has a structural shortfall as it accounts for not more than per cent of the total banana market at present. Consequently, the restrictions applied to bananas from our countries violate the obligations entered into by the, and in particular by the above-mentioned member States as contracting parties, in accordance with the provisions of Article XI :. Article XIII Although it is obvious that the measures under consideration constitute a violation of Article XI : and are not justified by any of the exceptions of paragraph of that Article, we think it is worth examining the application of the banana restrictions from the standpoint of Article XIII, which governs the non-discriminatory administration of quantitative restrictions. In particular, mention should be made of paragraph, which provides that any measure such as tacit prohibition, licensing or quotas applied to imports must be applied uniformly to third countries, in other words, in a non-discriminatory manner. In the case of bananas from our region, it is obvious that the régime discriminates against our countries' exporters, since the ACP countries, which are not considered Community producers, entirely escape the restrictions. Part IV on trade and development By imposing restrictions on bananas from our countries, the fails to comply with the commitments entered into by developed contracting parties on behalf of less-developed contracting parties to provide more favourable access conditions, as provided for in Part IV, Article XXXVI, of the General Agreement.

7 DS/ Page In particular, Article XXXVII:(a) establishes the basic policy provisions for developed countries, including the, to accord "priority to the reduction and elimination of barriers" to trade; in the case of bananas from our countries, the took the opposite path, and naturally failed to comply with this priority for the reduction of trade barriers. Paragraph (b) states that the developed countries shall "refrain from introducing... customs duties or non-tariff import barriers on products.. of particular export interest to less-developed contracting parties". There can be no doubt that bananas are of particular interest for our developing countries. The analysis of the import restrictions clearly shows that the agreed objective is not even remotely fulfilled. The not only has not refrained from introducing import restrictions on bananas from our countries, but also does not intend to reduce or eliminate them, according to what was said during the Article XXII: consultations. It is clearly evident from the foregoing that the restrictions on bananas from our countries do not comply with the policy objective agreed in Part IV of the General Agreement. Article XXIII: When obligations under the General Agreement such as those that have been mentioned are violated, there is a clear prima facie case of nullification or impairment of benefits accruing under the General Agreement. The presumption of injury is particularly important in the case of the imposition of quantitative restrictions. The practice in GATT, and particularly since the Panel on Uruguayan Recourse to Article XXIII, has followed to the letter the conclusions of that Panel, particularly by reiterating that in cases where there is a clear breach of the General Agreement the measures in question constitute a prima facie case of nullification or impairment. Accordingly, in this case there is a prima facie case of nullification or impairment of benefits accruing under the General Agreement. This is the situation as regards the banana import régime applied to our bananas by France, Spain, Great Britain, Portugal, Italy and Greece, which blatantly violate Articles XI, XIII and Part IV of the General Agreement. This is sufficient grounds for determining that there exists, within the meaning of Article XXIII:, a presumption of nullification or impairment of benefits accruing to our countries under the General Agreement as contracting parties thereto. Finally, in the GATT dispute settlement cases it has been established that regardless of whether or not suppliers facing import restrictions have achieved export growth, such growth cannot serve to legalize the restrictions, since loss of trade opportunities and trade distortion exist.

8 DS/ Page Article XX The general exceptions established by the General Agreement in Article XX are irrelevant to our complaint. The banana import régimes of the member States are not related in any way to, for example, public morals, sanitary or phytosanitary measures, trade in gold or silver, intellectual property, products of prison labour, national treasures, natural resources or intergovernmental commodity agreements. V. CONCLUSION On the basis of the foregoing, we conclude that the complex systems of import restrictions applied to bananas from our countries by France, Spain, Great Britain, Portugal, Italy and Greece, are therefore in breach of Articles XI, XIII and Part IV of the General Agreement. Hence there is a prima facie case of nullification or impairment of our rights under the General Agreement. Accordingly, these banana import régimes must be dismantled and brought into conformity with the General Agreement. Geneva, October

9 Bananas Country/region Volume % COLOMBIA* E Germany Belgium Denmark France Greece Ireland Italy Netherlands Portugal United Kingdom COSTA RICA* E Germany Belgium France Greece Ireland Italy Netherlands Portugal United Kingdom GUATEMALA* E Germany Belgium Denmark France Italy Netherlands United Kingdom NICARAGUA* E Germany Belgium Denmark Ireland Italy Netherlands Portugal HONDURAS E Germany Belgium Denmark France Ireland Italy Netherlands United Kingdom TABLE Volume of Exports to the E from (-) (Thousand tons) Volume % Volume % Q. DS/ Page Latin America Volume % Volume %,. : :

10 DS/ Page TABLE (Cont'd) Country/region Volume % Volume % Volume % Volume % Volume % PANAMA E Germany Belgium France Italy Netherlands Portugal United Kingdom Û UADOR, E Germany Belgium France Ireland Italy Netherlands Portugal United Kingdom,,., TOTAL LATIN AMERICA E, Germany Belgium Denmark France Greece Ireland Italy Netherlands Portugal United Kingdom,,,,,,, * GATT contracting parties Source: UPEB.

11 DS/ Page TABLE Bananas: CIF Price of Exports to the E from Latin which. are : GATT Contract: Lng Parties American Countries (-) (US$/ton) Country CIF price CIF price CIF price CIF price CIF price Colombia Costa Rica Guatemala Nicaragua Average Source: UPEB.

12 DS/ Page Bananas: Volume of Exports from Latin America (-) (Thousand tons) Country/region Volume % Volume % Volume % Volume % Volume % Colombia*. Europe. Costa Rica*, Europe,,., Guatemala*, Europe Nicaragua*, Europe Venezuela*, Europe ;. Ecuador, Europe,,,,,.. Honduras, Europe Panama, Europe F GATT contracting parties Source: UPEB and the countries mentioned