Statement on Bananas by Honourable. Charles Savarin, Minister for Foreign Affairs, Trade and Labour

(CARICOM Secretariat, Turkeyen, Greater Georgetown, Guyana) The Commonwealth of Dominica welcomes this opportunity to speak on the issue of bananas. The future trading regime for bananas is a cause for great anxiety to the people of Dominica and other Caribbean States who have derived their livelihoods from the commodity over the last fifty years. Banana production in Dominica provides employment for over 85% of the rural population and is the primary source of employment for women. Banana exports represent over 80% of agricultural exports and yields approximately 20% of total export earnings. While this demonstrates the importance of bananas to Dominica’s economy in terms of production and trade, it has to be pointed out that the value of Dominica’s production and trade in bananas as a percentage of global production and trade is very miniscule.
It is well known that ACP’s share of the world market for bananas is less than 6%. We do not supply not even one kilo of the giant North American market.

The foundation of Dominica’s small and vulnerable economy has been built for the most part with the export earnings from bananas. This has been done in the face of considerable decline in overseas development assistance in the last twenty years. Trade is indispensable to Dominica’s development and we continue to seek all opportunities to bolster our capacity to trade. We have therefore come to Hong Kong with the hope that we will contribute to the realization of an equitable and fair multilateral trading regime that will ensure our continued economic survival and development.

Mr. Chairman,

The objectives of the Doha Round placed emphasis on development. For us in Dominica and the ACP this means among other things, achieving poverty reduction and the attendant realisation of the Millennium Development Goals. It is vitally important that this does not get lost at this Hong Kong meeting. Any new banana regime must therefore positively advance poverty reduction goals and facilitate continued prosperity for farmers, women and children in Dominica and other developing and small vulnerable banana producing countries. In other words the new banana regime should not lead to increased poverty, destruction of livelihoods or reduction in the standard of living of those in Dominica and other ACP states involved in the banana trade.

Mr. Chairman,

The EC has proposed a new tariff of €176 per tonne to be applied as of January 1, 2006. This comes in response to the ruling of the WTO arbitrators as well as the commitment that was made to introduce a single tariff regime in connection with the waiver granted to bananas the last time we met in Doha. This new tariff represents the third consecutive reduction from the original proposal of s tariff of €230 per tonne. It is well known that that original proposed tariff rate was below what Dominica and the ACP considered adequate to maintain their level of market access to the EU market and the survival of the banana industry in our countries. It should therefore come as no surprise that the latest tariff proposal is of serious concern to my delegation and to the rest of the Caribbean and ACP producing countries as it will result in further eradication of small farmers from the industry. Contrary to assertions being made, this tariff will result in increased flows of MFN bananas to the European Union and a drop. n prices below the level at which we could continue to supply.

Mr. Chairman,

The continuation of preferential access to the EU market for bananas originating in the ACP is critically important for Dominica. In fact Mr. Chairman I feel compelled to state that from my delegation’s perspective the continuation of the present arrangement, at least for the immediate future, would be the most preferred outcome to this long running banana dispute.

Now I am fully aware what would be the immediate response to this statement from non ACP banana producers. However Mr. Chairman, it is not outside the realm of possibility or ability of those of us gathered here to bring about a satisfactory outcome. In a members driven organisation where the rules are written by the members for the members, the rules must be made to accommodate the members and not the other way around. We must understand that the EU does not produce bananas for export. Neither for that matter, does the US on its territory. The EU offers access to its market to us in the ACP and to MFN suppliers. There is room for all of us. It is not a case of EU subsidized bananas unfairly competing with developing countries’ bananas. The real issue is that there is one set of developing country producers or if you prefer one set of producers in developing countries adopting positions which could wipe out the trade of other more vulnerable developing countries with the attendant consequences for unemployment and increased poverty.

If however an equitable outcome proves illusive in the short term, then I need to state here that in a tariff-only regime, the latest proposal by the EU of a tariff of €176 per tonne is the minimum tariff level that Dominica would be able to support. In any event Mr. Chairman, I wish to repeat the need for continuing preferential access for bananas from Dominica and the ACP to the EU market. That preference is now at its lowest possible level.

Mr. Chairman,

In conclusion let me reiterate that development and the eradication of poverty must be essential elements underpinning any regime governing trade at the multilateral level and therefore by necessity trade in bananas. We must strive for a fair and equitable trading regime that guarantees prosperity for all the peoples of the world, especially the marginalized small farmers and women. Let us not like Shylock, who did not rely on sentimentalism but on the letter of his contract, demand our pound of flesh regardless of the impact on him that gives. Let us work towards realizing the noble development objectives enunciated by paragraph 35 of the Doha Mandate and the July 2004 framework and not condemn small farmers and small vulnerable states to a future of persistent poverty.