Ref. Ares(2018)5535875 - 29/10/2018
Ref. Ares(2019)4162692 - 01/07/2019
EUROPEAN COMMISSION
DIRECTORATE-GENERAL FOR AGRICULTURE AND RURAL DEVELOPMENT
Deputy Director General, in charge of Directorates A, B and C
Brussels,
- agri.ddg1.a.3(2018)6139428
NOTE TO MR JERZY PLEWA
DIRECTOR-GENERAL DG AGRI
Subject:
Stabilisation Mechanism for bananas - Overview on imports from
Latin American countries (Central America, Peru, Colombia and
Ecuador)
Imports of bananas from Latin America countries are subject to a Stabilisation
Mechanism, as foreseen in the Free Trade Agreement with Colombia, Ecuador and Peru
and in the Trade Pillar of the Association Agreement with the countries of Central
America – CA (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama).
The Stabilisation Mechanism is implemented by Union legislation and will expire by 31
December 2019.
The Stabilisation Mechanism provides for the possibility for the EU to suspend, for a
period not exceeding three months, the application of the preferential customs duty for
the imports of bananas from a given country exceeding its trigger import volume, as
defined under the relevant Agreement.
This note aims at informing you about the state of play of imports of bananas from Latin
America countries and at seeking your opinion on the position to be taken by the
Commission concerning Guatemala and Peru that have exceeded their trigger import
level in respectively early September and mid-October of this year.
It should be also noted that the forthcoming end of the Stabilisation Mechanism by 31
December 2019 is accompanied by a series of commitments that the Commission
undertook with the relevant implementing legislation. A report concerning the situation
of the European Union banana producers is foreseen in January 2019 and an overall
assessment of the Mechanism to the EP and Council is foreseen after its expiry on 31
December 2019. Both Agreements also provide that the Parties shall examine the
improvement of the banana tariff liberalisation upon the expiry of the Stabilisation
Mechanism.
1.
IMPORT OF BANANAS FROM PERU IN 2018
The trigger import volume for Peru, for this year of implementation of the Agreement, is
set at 97 500 tonnes (93 750 tonnes in 2017) representing 1.6% of the total trigger import
volume under the Stabilisation Mechanism in 2018. Similar percentages applied in the
Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel. +32 22991111
previous years. The preferential customs duty for 2018 (all Latin America countries
excepted Ecuador) is set at 89 EUR/t (90 EUR/t for Ecuador).
On 6 August 2018, imports of bananas from Peru reached 80% of this year's trigger
import volume (by 16 August in 2017). They reached 100% of the 2018 trigger import
volume on 16 October (similarly in 2017). This is the sixth year in a row Peru has
exceeded its trigger import volume since the provisional application of the Agreement in
2013, however always towards the last part of calendar year.
2.
IMPORT OF BANANAS FROM GUATEMALA IN 2018
The trigger import volume for Guatemala in 2018 is set at 70 000 tones (67 500 tonnes in
2017) representing 1.2% of the total trigger import volume under the Stabilisation
Mechanism in 2018. Similar percentages applied in the previous years. The preferential
customs duty for 2018 (all Latin America countries) is set at 89 EUR/t (96 EUR/t in
2017).
Guatemala reached 100% of its 2018 trigger import volume in the week of 10 September
2018 (by 3 October in 2017). This is the fourth consecutive year since 2015 that
Guatemala reaches its corresponding trigger import level.
3.
IMPORT OF BANANAS FROM OTHER LATIN AMERICA COUNTRIES IN 2018
Nicaragua's trigger import volume corresponds to 14 000 tonnes in 2018 (0.2% of the
total trigger import volume). It was reached on 10 April 2018 for the third consecutive
year since 2016. The Commission (DG TRADE lead), decided not to suspend the
preferential customs duty in June 20181 on the grounds that there was no indication
pointing to a disturbance of the stability of the Union market taking into account imports
from other countries and the prices in the market.
Imports from the other countries under the stabilisation mechanism follow the pattern of
previous years. Imports from Central America are at 62% of their aggregate trigger
import volume (mainly Costa Rica) while Ecuador and Colombia have respectively
reached 65% and 52% (situation 16/10/2018).
4.
THE STABILISATION MECHANISM FOR BANANAS
The Stabilisation Mechanism for bananas was introduced by the 2012 Free Trade
Agreement between the European Union and Colombia and Peru and by the EU-Central
America Association Agreement, which started applying in 2013. It provides for specific
increasing trigger import volumes for each country with a descending preferential
customs duty and for the possibility for the EU to temporarily suspend the preferential
customs duty once the trigger import volume is reached. The stabilisation mechanism is
applicable until the end of 2019, date on which the import duty will be set permanently at
75 EUR/t.
1 Commission Implementing Decision (EU) 2018/874 of 14 June 2018 determining that a temporary
suspension of the preferential customs duty pursuant to Article 15 of Regulation (EU) No 20/2013 of the
European Parliament and of the Council is not appropriate for imports of bananas originating in
Nicaragua – OJ L 152 of 15.6.2018, p.58.
2
Regulations (EU) No 19/20132 and (EU) No 20/20133 implement the Stabilisation
Mechanism for bananas under the above-mentioned Agreements. Regulation 19/2013
was amended in January 2017 following the accession of Ecuador to the Agreement with
Colombia and Peru, to provide for the effective implementation of the banana
Stabilisation Mechanism also in relation to imports of bananas from Ecuador.4
Pursuant to Articles 15(2) of these Regulations, once the defined trigger import volume is
exceeded for imports of fresh bananas5 from each of the countries concerned, the
Commission shall adopt an implementing act by which it may either temporarily suspend
the preferential customs duty applied to imports of bananas from this country, or
determine that such suspension is not appropriate.
The criterion for deciding to suspend the preferential duty or not, as set out in Articles
15(3) of the above-mentioned Regulations, is whether or not the EU market is at risk of
destabilisation. This paragraph establishes that the decision takes into consideration the
impact of the imports concerned on the situation of the EU market for bananas. The
examination concerns the following factors: effect of the imports concerned on the EU
price level, development of imports from other sources, overall stability of the EU
market.
Prior to the European Parliament's consent to these Regulations, it was agreed that the
possible suspension would not be automatic (otherwise it would have been in breach of
the Agreements negotiated), but a consequence of an analysis on the impact on the EU
market. The suspension would be in any case limited to three months and not be
applicable after 31 December of each calendar year.
In the five years since the entry into force of the Agreements, Nicaragua, Peru and
Guatemala have reached the trigger import volumes for a given calendar year and in
every occasion it has been determined that the suspension of the preferential customs
duty was not appropriate. The way the Stabilisation Mechanism works spurred some
criticism, notably on its non-automaticity. Since the trilogues of December 2016 that led
to the amendment of Regulation 19/2013 to take into account of Ecuador's accession, the
Commission services have consequently enacted different additional measures: DG
TAXUD imports surveillance webpage now includes an ad-hoc reference to bananas with
detailed information on imports on a weekly basis. Furthermore, the Commission
systematically informs the European Parliament (INTA Committee) when 80% of the
trigger import volumes are reached.
2 Regulation (EU) No 19/2013 of the European Parliament and of the Council of 15 January 2013
implementing the bilateral safeguard clause and the stabilisation mechanism for bananas of the Trade
Agreement between the European Union and its Member States, of the one part, and Colombia and
Peru, of the other part – OJ L 17 of 19.01.2013, p.2.
3 Regulation (EU) No 20/2013 of the European Parliament and of the Council of 15 January 2013
implementing the bilateral safeguard clause and the stabilisation mechanism for bananas of the
Agreement establishing an Association between the European Union and its Member States, on the
one hand, and Central America on the other – OJ L 17 of 19.01.2013, p.13, recently modified by
Regulation (UE) No 2017/540 of the European Parliament and of the Council of 15 March 2017 - OJ L
88 of 31.3.2017, p. 1.
4 Regulation (UE) No 2017/540 of the European Parliament and of the Council of 15 March 2017 - OJ L
88 of 31.3.2017, p. 1.
5 CN heading 08039010
3
5.
EVALUATION OF CONDITIONS BASED ON REGULATIONS (EU) NO 19/2013 AND
(EU) NO 20/2013
Unit AGRI G.2 has analysed the situation of the banana market in the EU, for imports
and for domestic production. This analysis is available in Annex I.
The following elements can be highlighted:
– cumulative imports of fresh bananas from Nicaragua, Guatemala and Peru remains
below 6.% of the total imports of fresh bananas into the European Union (5.4%
January-August 20186);
– average wholesale prices of yellow bananas produced in the EU are at a 17%
higher than in 2017 (situation 16/10/2018);
– there is no indication that the stability of the EU market has been disturbed by the
imports of fresh bananas from Nicaragua, Guatemala and Peru above their defined
annual trigger import volumes;
– Central American countries other than Guatemala and Nicaragua are far below
their trigger volumes and the total trigger import volumes of "Central America"
will probably not be reached in 2018
– Ecuador and Colombia, the biggest banana exporters of Latin America together
with Costa Rica, only reached 65% and 52% respectively of their trigger levels;
– there is no threat of serious deterioration nor a serious deterioration for producers
in the outermost regions of the EU.
At this stage and considering the current volumes, the trigger import volume for Peru, as
well as of Guatemala and Nicaragua, are considered as not likely, on their own, to have a
negative impact on the total EU market.
6.
PROPOSED DECISION AND SUGGESTED COURSE OF ACTION
Taking the above into account, it is proposed that the preferential duty on imports of
bananas from Guatemala and Peru are not suspended in 2018.
It should be highlighted that the banana imports, even under the Stabilisation
Mechanism, remain a sensitive issue. Therefore, it is most likely that the upcoming
Commission Decisions not to suspend the preferential duties on imports of bananas from
Guatemala and Peru are closely followed up by different stakeholders.
The proactive exchange of information with both the EP and the Council should however
help easing criticism received during past years on the way the mechanism works, since
both Institutions are now more involved in how and when this Decision on suspension is
taken.
I would like to underline that the reports that the Commission is due to present on the
situation of the Union banana producers in January 2019 and the report on the overall
assessment of the mechanism to the EP and Council after the expiry of the Banana
6 TAXUD Surveillance data on banana imports.
4
Stabilisation mechanism on 31 December 2019 are expected to attract interest from all
EU Institutions, stakeholders and third countries during the course of next year.
María de los Ángeles BENITEZ SALAS
Enclosure:
Market analysis by Unit AGRI G.2
c.c.:
J. Clarke, J. Schaps,
5
Electronically signed on 26/10/2018 16:41 (UTC+02) in accordance with article 4 2 (Validity of electronic documents) of Commission Decision 2004/563