The Continuing Saga of the EU Banana Debate: An Analysis of Possible Refinements to the 2006 EU Banana Trade Regime. (98)
AbstractThe debate over the European Union (EU) banana trade regime has raged for more than a decade. The focus of the debate has been the preferences offered by the European Union to banana producing ACP countries located in Africa and the Caribbean. In 2001, an agreement was reached in which the European Union agreed to a tariff-only import system to be fully implemented by 2006. In this paper, a spatial equilibrium model of the world banana market is developed and validated using trade data from the FAO. The model is used to project the likely impact of the new EU banana trade regime on both ACP and non-ACP banana exporters. The results suggest that the level of exports from the ACP producers will not be adversely affected by adoption of a tariff-only scheme in the European Union. Small reductions in the tariff advantage afforded to the ACP suppliers would result in little effect on their exports. The imposition of a flat tariff of 75 ECU on all exporters would result in a major decline in ACP exports.