CARIBBEAN-TRADE: The Fight For Preferential Treatment Continues

By IPS Correspondents Reprint | | Print |

Wesley Gibbings

PORT OF SPAIN, Jul 9 1996 (IPS) - As the hurricane season gets into full swing, regional banana producers are as apprehensive about the toll natural disasters are likely to take on production as they are about the effect of possible dismantled trading arrangements.

Just as natural disasters like floods, drought and hurricanes have crippled the industry which is the lifeblood of the economies of many of the small states in the region, so any new arrangement which takes away preferential treatment for the commodity entering the European Union market could herald the collapse of the industry, analysts say.

And United States president Bill Clinton’s recent response to Jamaica’s Prime Minister Percival Patterson’s plea to “lay off” the continued opposition by his country and its Central American allies to the EU’s preferential trading arrangements with territories of the African, Caribbean and Pacific (ACP) bloc under the Lome IV agreement has brought little solace.

This is notwithstanding Clinton’s promise that should there be a resolution at the bilateral level or through the use of a “wider format” … “the WTO (World Trade Organisation) panel process can be stopped.”

After years of debate, the EU agreed in 1993 that African, Caribbean and Pacific members of the Lome Convention — a special trade pact between the EU and the ACP — should be given an annual duty-free quota of 857,000 tonnes a year for the EU market. Latin American bananas were granted a tariff of 2.1 million tonnes.

Washington claims that the EU regime favours ACP exports over Latin American products.

But all is not lost, say officials. The 14-nation Caribbean Community (Caricom) grouping has welcomed plans for a meeting between Central American producers and their Caribbean counterparts in Belize in October.

The meeting is being promoted at the Central American level by former Costa Rican president and 1987 Nobel Peace Prize winner Oscar Arias.

Ecuador, Guatemala, Honduras and Mexico have teamed up with the United States to fight the banana protocol under Lome IV by way of a WTO objection.

This situation has been described by Patterson who has responsibility for coordinating Caricom’s external relations functions as “potentially disastrous” not only for the prolific Windward Islands, Belize, Jamaican and Surinamese producers but for the non-banana producing members of the 14-nation regional grouping which rely heavily on these countries as markets for their products.

As a direct response to the United States/Central America pressure, the EU Banana Management Committee has increased the dollar quota for the last quarter of 1996 from 2.2 million tonnes to 2.55 million tonnes. This, regional analysts say, will have a negative impact on prices that are already under pressure.

Dominica’s Prime Minister Edison James says the issues continue to be of grave concern to the region “notwithstanding the fact that our growers have been making tremendous efforts to meet the demands of quality and productivity.

“We continue to have to spend a lot of time and resources that we do not have to seek to fight off that (U.S.) challenge,” he says. “We think it is regrettable, especially when we reflect on where … that challenge is coming from.”

But Belizean prime minister, Manuel Esquivel believes the forthcoming dialogue will be useful.

It “will allow the two major players in this issue, a greater understanding of the problems we face and, perhaps, show us a way forward where we could confront this issue … from a common understanding rather than the current situation in which some members of the Central and Latin American producing countries are on one side of the issue and some others and ourselves are on the other side of the issue.”

Caricom has been lobbying, without much success, at two levels. The first is at the level of the EU where efforts have been made to have the Banana Management Committee eliminate the principle of country quotas — a move that would mean the abandonment of its Framework Agreement with the four Latin American producers.

The Caribbean producers have also sought to have an “in tariff quota” applicable to non-ACP producers increased from 2.5 million to 2.75 million tonnes. This is the level at which European tariffs will apply to Latin American imports.

Caricom has also launched a series of costly lobbying efforts in Washington that have stirred some interest at the level of the U.S. Congress. During last week’s Caricom Summit in Barbados, St. Lucia’s prime minister Vaughan Lewis participated in discussions with Florida Senator Bob Graham.

Lewis, who up to early this year headed the Secretariat of the Organisation of Eastern Caribbean States (OECS) as director- general, says the talks attempted to impress upon Graham the importance of the industry to the region.

“It is important for us that the politicians and intellectual people in the United States understand the problem that we have with the United States at this time,” Lewis says.

The St. Lucian prime minister also met last week with EU delegates. “The European Union is indicating that it wishes to give substantial assistance for the domestic rehabilitation of the industry and we have a variety of problems related to how that rehabilitation is to be done,” Lewis says.

A series of internal meetings and encounters with the EU has been planned to ensure that the region reaps optimum benefits from the rehabilitation.

Additionally, Lewis has met with a number of senior Mexican officials on the matter. The prime minister says the meeting was designed to impress upon the Mexicans “the difficulties which are arising out of this appeal to the WTO.”

The Mexicans have indicated an interest in promoting development cooperation agreements with Caricom. “We have been trying to say (to) them that it is important that we have social stability, based on economic stability, based on agricultural stability, if we are to have the means whereby we can have that sort of cooperation,” Lewis says.

“We have tried to appeal to them again to look at this issue, look at our position in the market, look at our small proportion of the market and see whether it is worth the while ruining small countries for that small proportion of the market in bananas,” he adds.

A major plank of the United States stance on the banana protocol is that the Caribbean should explore alternatives to what Clinton describes in his letter as “discriminatory and unnecessarily restrictive regulations” established by the EU regime.

“US officials remain ready to meet informally with Caribbean countries to search for mutually acceptable alternatives to the current EU system,” Clinton says. “We should use such a process to seek alternatives that would be better for the Caribbean and other Western Hemisphere interests, including the United States, than current EU restrictions.”

James however argues: “We are comfortable with the EU regime and if they have an alternative … which will not damage us then they must come forward with that … but they are not doing that.”