EU: Trade Agreement on Banana Imports

Baroness Hooper Excerpts

Tuesday 7th February 2012 Lords Chamber

Asked by

[Baroness Hooper]

To ask Her Majesty’s Government what is their assessment of the effects of the European Union trade agreement on banana imports and its impact on African, Caribbean and Pacific banana producers.

--- Later in debate ---

[Baroness Hooper]

My Lords, when this Question was tabled, it was very topical. Now, almost two years later, having been retabled and having awaited a suitable time slot, I think it is still topical. The point is that bananas are very important to all of us. I am told, and I am quite prepared to accept without further research, that bananas are the most eaten fruit in the world and that the European Union market is the world’s largest consumer of the fruit. It is also well known that bananas provide a very healthy component of our diet, being rich in potassium.

On a personal note, I can well remember as a small child in post-war Britain eating my first banana. They were a rarity then, which seems incredible now, but I have always loved bananas since then and taken an interest in policies affecting them. Imagine my good fortune when the time came for me to take up a postgraduate fellowship in international law and economics at the Universidad Central del Ecuador in Quito, only to discover that Ecuador was a major producer of bananas. To this day, I find Ecuadorian bananas have a special taste, and it is one that I enjoy—with no disrespect, of course, to other producer countries.

As I said at the outset, this Question was tabled in 2010, following the historic Geneva Agreement on Trade in Bananas. The agreement came to be known as “the end of the banana saga”. The long-running trade conflict that preceded it has been described as,

“one of the most technically complex, politically sensitive and commercially meaningful legal disputes ever brought to the WTO”—

the World Trade Organisation. The bone of contention lay in the fact that the big American companies like Chiquita and Dole, the “dollar banana” producers, which farmed large plantations in Ecuador, Venezuela, Colombia and elsewhere in Latin America, were able to undercut the prices of the smaller banana producers, which were covered by the ACP—African, Caribbean and Pacific—policies of the European Union, which gave preferential trade terms to these small countries and imposed high tariffs on the Latin American exporters.

In talking of the ACP countries, I am referring to the 10 main banana-exporting countries: Belize, Cameroon, Côte d’Ivoire, Dominica, the Dominican Republic, Ghana, Jamaica, St Lucia, St Vincent and the Grenadines, and Suriname. It is an exotic roll call, and I know that in this short debate we shall hear in more detail about specific countries.

The deal between the European Union, Latin American banana producers and the United States aimed to comply with WTO policies and settled the 15 years of banana disputes. It cut the tariff that applied to Latin American banana imports to the EU countries and led to measures to help ACP countries to adjust to this new trading environment by providing financial support for investments in the improvement of competitiveness, economic diversification policies and broader social, economic and environmental impacts. In addition, it has to be said, ACP banana countries continued to enjoy duty- and quota-free access to the European Union under economic partnership agreements, which are separate trade and development agreements.

I believe that it is fairer to have a policy of social support for poor producing countries than to introduce a system of quotas, which encourages everyone to have a go. I am in favour of that policy. My main question to the Government and the Minister is on whether these arrangements are working. Is there fair and free access to European Union markets for Latin American bananas and the ACP product? Have the ACP countries been able to keep up the viability of their small-scale production without the preferences that they previously enjoyed? Have the special measures intended to help the ACP countries adapt to the effects of changes in the EU import regime really worked?

Given that the integration of all developing countries into the multilateral trading system and the global economy is a key European Union development objective, have the banana accompanying measures, which are known as BAM, been adequate? Has the €190 million budget been enough to meet the needs? These measures were due to last for four years from 2010 to 2013. Perhaps this is a good moment to ask whether there is an intention to review and renew these measures.

In considering these issues, it must always be remembered that bananas are crucial to the livelihoods of millions of people and a major source of export revenue for many developing countries—not only for the small countries, but also for the people working in the large plantations who are equally dependent on bananas as a source of livelihood. However, I recognise that the Caribbean countries have a special case. In particular, many of these small island nations previously produced sugar cane but, as a result of European Economic Community—as it was then known—policies which supported the production of sugar beet, they had to diversify. Because of climate and other weather conditions, bananas took over as the only suitable alternative crop.

As I have a few moments left, perhaps I may mention a couple of somewhat unrelated points. There may be other ways to use bananas in order to increase the size of the market—for example, as an alternative energy source. The foliage and fibre, which comes at the end of the production of the fruit, could be used to create biomass energy rather than simply being burnt off as it is currently. Research would have to be initiated to analyse its viability. Perhaps the University of the West Indies could consider doing something on those lines.

Most bananas carry a country-of-origin label and you know whether you are buying Colombian, Costa Rican or Ecuadorian bananas. But fair trade bananas carry only a fair trade label. Is there an explanation for that? It is possible that some other speakers may have the answer, as well as my noble friend.

As a postscript, I say that over the years your Lordships’ House has had many opportunities to debate the subject of bananas, largely because of the long-running trade dispute. That situation may happily have changed and the future may not hold so many banana debates. I cannot resist mentioning the last occasion on which we had such a debate—I think it was in 2006—which the noble Viscount, Lord Montgomery of Alamein, introduced. It is good that he is here today to give continuity.

I also remember a much earlier debate when the late Lord Pitt of Hampstead participated. He spoke on behalf of the producers in Grenada. Therefore, I am very happy to see his noble kinswoman, the noble Baroness, Lady Howells of St Davids, will be lending her voice to today’s proceedings. I thank all of your Lordships who are joining in the debate and I look forward to listening and learning from all the contributions, and from the Minister’s reply.