Ref. Ares(2017)4751790 - 29/09/2017
Ref. Ares(2019)7048739 - 14/11/2019
EUROPEAN COMMISSION
DIRECTORATE-GENERAL FOR AGRICULTURE AND RURAL DEVELOPMENT
Deputy Director General, in charge of Directorates A, B and C
Brussels,
Art. /agri.ddg1.a.3(2017)5164313
4.1(b)-
privacy
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)
This note aims at informing you about the state of play of imports of bananas from Latin
American countries and at seeking your opinion on the position to be taken by the
Commission in the coming weeks when Peru reaches the trigger volume established
under the stabilisation mechanism for bananas.
1.
ISSUE AT STAKE
The trigger volumes for Peru, for this year of implementation of the Agreement, is set at
93 750 tonnes. On 16 August 2017, the imported volumes reached 80% of this year's
volume. It is most likely that Peru will exceed its trigger volume in October. This would
be the fifth year in a row as it also happened in October 2016, October 2015, November
2014, and November 2013, always towards the end of the respective year.
2.
BACKGROUND
A stabilisation mechanism for bananas has been introduced by the 2012 Free Trade
Agreement between the European Union and Colombia and Peru and by the EU-Central
America Association Agreement, which entered into force on 1 December 2013. They
foresee specific increasing trigger volumes for each country with a descending import
duty. The stabilisation mechanisms are applicable until the end of 2019, date on which
the import duty will be set permanently at 75€/t. The temporary suspension of the
preferential duty is not meant to be automatic: once imports reach the trigger volumes
set, both agreements specify that it may be applied.
Regulations (EU) No 19/20131 and (EU) No 20/20132 implement the bilateral safeguard
clause and the stabilisation mechanisms for bananas of respectively the Trade Agreement
1
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, 19.01.2013, p.2.
Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel. +32 22991111
with Colombia and Peru and the Association Agreement with Central America.
Regulation 19/2013 was amended in January 2017 following the entry into force of the
agreement with Ecuador, to allow for the effective implementation of the banana
stabilisation mechanism also in relation to Ecuador.3
Pursuant to Articles 15(2) of these Regulations, once a defined trigger volume is
exceeded for imports of fresh bananas4 from one of the partner countries, 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 said 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 Trade Agreements, Nicaragua, Peru and
Guatemala have reached the trigger volumes for a given calendar year and in every
occasion it has been determined that the suspension was not appropriate. The way the
stabilisation mechanism works spurred some criticism, notably on its non-automaticity,
which implies that the established trigger volumes may be reached by a country during a
given calendar year but the Commission decided not to take action, i.e. not suspending
the trade preferences granted, if the EU banana market is not disrupted by that surge of
imports.
Since the trilogue discussion in December 2016 that led to the amendment of Regulation
19/2013, the Commission services have enacted different 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% trigger levels are
reached.
2
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, 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, 31.3.2017, p. 1.
3
Regulation (UE) No 2017/540 of the European Parliament and of the Council of 15 March 2017 - OJ L
88, 31.3.2017, p. 1.
4
CN heading 08039010
2
This year, Nicaragua and Guatemala have already overshot they trigger levels, on 2 May
and 3 August respectively. Nicaragua exceeded its trigger volume for the second year in
a row and quite early in the year while Guatemala did so for the third consecutive year.
On 20 June 2017, the Commission already decided that the suspension of the preferential
customs duty on bananas originating in Nicaragua was not appropriate5. However,
considering the early overshooting by Nicaragua, Commission Implementing Decision
(EU) 2017/1104 indicated (recital 8) that the Commission services will continue to
closely monitor banana imports and adapt measures if appropriate.
The decision not to suspend the preferential duties for Nicaragua triggered the reaction of
stakeholders, in particular EURODOM and Canary Islands (see Ares(2017)3740116).
The Commission will take a similar position (no suspension of the preferential customs
duty) with regard to the recent overshot by Guatemala, a minor player in the Latin
American region, of its trigger volume6.
3.
EVALUATION OF CONDITIONS BASED ON REG. 19/2013
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
represented
only 6.28 % of the total imports of fresh bananas into the European
Union in the period January-August 20177;
– average wholesale prices of yellow bananas produced in the EU follow their
seasonal trend;
– 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 volumes of "Central America" will
probably not be reached in 2017;
– Ecuador and Colombia, the biggest banana exporters of Latin America, only
reached 48% and 52% respectively of their trigger levels;
– as requested by Regulation 19/2013, there is no threat of serious deterioration nor a
serious deterioration for producers in the outermost regions of the EU.
5 Commission Implementing Decision (EU) 217/1104 of 20 June 2017, determining that a temporary
suspension of the preferential customs duty pursuant to Article 15 of Regulation (EU) No 20/2013 is
not appropriate for imports of bananas originating in Nicaragua, OJ L 158 p. 49.
6 DG TRADE ISC/2017/06465 on the COMMISSION IMPLEMENTING DECISION (EU)
determining that a temporary suspension of the preferential customs duty pursuant to Article 15 of
Regulation (EU) No 20/2013 is not appropriate for imports of bananas originating in Guatemala.
7 TAXUD Surveillance data on banana imports.
3
At this stage and considering the current volumes, the trigger volume for Peru, as those
of Guatemala and Nicaragua, are considered as not likely, on their own, to have a
negative impact on the total EU market.
4.
PROPOSED DECISION AND SUGGESTED COURSE OF ACTION
Taking the above into account, it is proposed that the preferential duty on imports of
bananas from Peru is not suspended in 2017.
It should be highlighted that the banana imports, even under the stabilisation mechanism,
remains a sensitive issue (see reactions referred to in section 2). Therefore, it is most
likely that the upcoming Commission Decisions not to suspend the preferential duties on
imports of bananas from Guatemala and Peru, as well as not to take similar measures for
Nicaragua, will be closely analysed. 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.
Maria Angeles BENITEZ SALAS
Enclosure:
Market analysis by Unit AGRI G.2
c.c.:
J. Clarke, J. Schaps, Article 4.1(b)-privacy
4
ANNEX 1
Detailed analysis of EU banana market: trigger volumes on 30 August 2017
1.
Legal basis
References:
Reg. n° 19/2013 implementing bilateral safeguard clause and stabilisation mechanism for
bananas of the Trade Agreement between EU and Colombia, Peru and Ecuador.
Reg. n° 20/2013 implementing bilateral safeguard clause and stabilisation mechanism for
bananas of the Trade Agreement between EU and Central America (of 29/06/2012).
2.
Trigger volumes and import of bananas originating from Peru and other
countries under stabilisation mechanism in 2017
Trigger volume for Peru for 2017 is set at 93 750 tonnes. The 80% of the trigger volume
(75.000 tonnes) was exceeded by Peru on 16 August.
As in previous years the total of all trigger volumes under stabilisation mechanism is
very unlikely to be reached in 2017. Central American countries other than Guatemala
and Nicaragua are far below their trigger volumes. The same goes for Ecuador and
Columbia. To date Guatemala, Nicaragua and Peru exceeded or are close to exceeding
their trigger volumes and it has to be noted that their trigger levels and imports are very
low compared to other countries under stabilisation mechanism (see Tab. 1 and Graph 2).
Graph 1. Weekly imports from Peru and trigger volume in 2017.
Source: TAXUD surveillance.
5
Tab.1. Summary table with trigger volumes and imports, situation on 30/08/2017.
Trigger
80% of
Import volumes
Quantities
Ratio
Country of
volume for
trigger
(TAXUD
available before
import/
Comments
Origin
2017
volume
surveil. )
trigger vol.
trigger vol.
(tonnes)
80% of the trigger volume reached on
Peru
93.750
75.000
78.128
15.622
83%
16/08/2017
Colombia
1.822.500
1.458.000
881.420
941.080
48%
Guatemala
67.500
54.000
69.592
-2.092
103%
trigger volume reached on 23/08/2017
Nicaragua
13.500
10.800
32.564
-19.064
241%
trigger volume reached on 02/05/2017
Ecuador
1.801.788
1.441.430
939.267
862.521
52%
Central
2.041.200
1.632.960
973.832
1.067.368
48%
America[1]
All origins
5.759.238
4.607.390
2.872.647
2.886.591
50%
[1] Central America Agreement includes: Costa Rica, Panama, Honduras, Guatemala, Nicaragua, El Salvador.
Source: TAXUD surveillance.
Graph 2. Imports from countries under surveillance mechanism in 2017.
6
According to Eurostat data from January to June 2017 the cumulative quantity of fresh
yellow banana imported from Peru was almost identical to respective imports in 2016
(see graph 3).
The imports unit value was around 720-760 euro/tonne, well above the average unit value
for bananas from Latin America (640-660 euro/tonne).
Graph 3. Monthly banana imports from Peru (cumulative volume).
Source: Eurostat, Comext
Graph 4. Average import unit values of bananas from Peru
Source: Eurostat, Comext
7
Graph 7. Average wholesale prices of yellow bananas imported from Latin America.
4.
Market Supply ACP bananas in 2017
According to Eurostat, monthly market supply of ACP bananas for the period January – June
2017 shows the volumes around 2 % higher than in the last 4 years on average and the average
unit values higher (+9%) than in same period of the 4 previous years.
The EU average wholesale ACP yellow banana prices have followed the seasonal trend.
Graph 8. Monthly "ACP" banana supply into the EU – in volumes
9
Graph 9. Monthly "ACP" banana supply into the EU – average unit value.
Graph 10. Average wholesale prices of yellow bananas coming from ACP countries.
5.
Production of European bananas and the EU banana market in 2017
According to the most recent MS' notifications (from 15.6.2017) the EU production forecast for
2017 shows the decline of around 5% compared to previous year. During the first four month
of 2017 (January-April) almost 21% less bananas were produced in the EU than in the same
period of 2016 and 15% less compared to the same period over the last 5 years on average. A
decline in production was recorded in all EU producing countries, however, the significant one
(-50 % in France) was to large extent explained by unfavourable weather conditions in
Guadeloupe and Martinique.
10
The average prices are expected to increase in Spain and Portugal, to decrease in
Martinique/Guadeloupe and keep stable trend in Greece. On the EU level the average prices are
expected to stay rather stable. .
The wholesale prices of EU yellow banana follow the annual trend.
We do not observe any disturbance in this market.
Graph 11. Banana production in the EU – in volumes
Graph 12. Banana production in the EU – average prices evolution.
11
Graph 13. Average wholesale prices of yellow bananas produced in the EU.
6.
Conclusions (on 30/08/2017)
Peru:
Trigger volume for Peru for 2017 is set at 93 750 tonnes. The 80% of the trigger volume
(75.000 tonnes) was exceeded by Peru on 16 August.
In the period January – June 2017 the imported quantities were similar to those in 2016
(see graph 3). Imports of fresh bananas from Peru represented only 2% of the total
imports of fresh bananas into the European Union and their unit value was well above the
average for bananas from Latin America (around 720-760 euro/tonne compared to the
average of 640-660 euro/tonne)
EU market:
According to the analysis made in the preceding chapters (Eurostat-Comext and TAXUD
Surveillance figures), no disturbance has been observed on the EU market so far. The
supply of bananas continues to increase regularly and follows the growing EU demand.
Wholesale yellow banana prices have shown slightly decreasing trend for Latin
American bananas and more significant downward trend for ACP bananas in the recent
weeks. Average wholesale prices of yellow bananas produced in the EU follow their
seasonal trend and for most of the weeks are at or above previous years' levels.
12
Electronically signed on 28/09/2017 12:59 (UTC+02) in accordance with article 4 2 (Validity of electronic documents) of Commission Decision 2004/563