So perhaps it is surprising to learn that the EU has also protected farmers in the Caribbean. They did this by putting a tax on bananas grown in countries that were not former colonies of EU countries benefiting mainly former UK and French dependencies in the West Indies.
Other countries, such as Costa Rica and Venezuela complained to the World Trade Organisation that this was unfair. Their plantation grown bananas were, according to them, bigger and better quality than the small Caribbean bananas and were being unfairly disadvantaged in the EU market.
For more than twenty years this dispute raged on and now the EU has agreed to lower the tariffs on bananas. (Details are in the linked Daily Telegraph article.)
So who has 'won'. Well the non-EU colonies have greater access to the EU market, so they have a victory. The other big winner is the EU consumer who will now be able to buy bananas more cheaply as tariffs fall and competition in the market will increase.
However the tariff is not abolished, just reduced. So EU consumers will still be paying more than they could do for bananas and so there is a continued welfare loss due to the tariff that remains.
The clear losers are Caribbean banana growers. They are high cost, small producers who operate in conditions that produced lower quality and smaller bananas than other countries. They will probably find their incomes will fall. Fortunately sugar cane is the best crop to use for making bio-fuel and the Caribbean is ideally suited to produce that leading to a rapid expansion of that industry.
A victory for partial free trade anyway.
I think that reducing or removing these taxes is a good thing. These caribbean islands are no longer part of the EU, and so do not contribute any money towards the EUs budget. However countries in the EU do, which comes from the taxes of the EU consumers. The priority of the EU should be (in my opinion) to be these people, who now have the option of better bananas at a fairer price.
ReplyDeleteThe Caribbean countries can also benefit if they chose to. By increasing their supply of sugar came they can help the environment (or reduce the harm being done to it) as well as gaining security. The world 's demand for energy is likely to only increase as the population and se of technology does likewise.
Georgina Davis
In countries such as the Carribean and Costa Rica, growing bananas and being part of the agriculutral business is tough, especially when you are relying on MEDC's to buy your stock to provide you with just enough money to give your family one meal a day. Of course we benefit here in the EU, but at what cost are these marginally cheaper bananas going to affect the farmers. I appreciate the growers in the Carribean have sugar cane to produce, but it could be costly and hard for them to suddenly swap their livlihoods. I think the largest exporters in the world of bananas are South America, so I feel a lowered tax that didn't affect the Carribean growers imports to an extent that they had to change to sugar cane would have been better.
ReplyDeleteGaby Preutz.
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