RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/W/324
19 October 2001
(01-5158)
Council for Trade in Goods Original:  Spanish
QUESTIONS FROM COSTA RICA REGARDING THE REQUESTS
FOR A WTO WAIVER CONCERNING THE NEW
ACP-EC PARTNERSHIP AGREEMENT
The following communication, dated 18 October 2001, has been received from the Permanent
Mission of Costa Rica.
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Pursuant to the proposal of the Chairman of the Council for Trade in Goods at the meeting on
11 October 2001 concerning the activity of the Working Party to examine the waiver request for thenew ACP-EC Partnership Agreement (PA), Costa Rica submits these comments and questions, for
replies from the European Communities and ACP countries (the applicants) and for consideration by
the Working Party.
Costa Rica has taken note of the comments by Mr. Pascal Lamy, the Commissioner for Trade
of the European Commission, in his letter dated 27 July 2001, in which he offers that, during the
90 days of consideration of the waiver request, the Commission is prepared to deal with each and
every one of the matters that may be raised concerning the request.  Costa Rica trusts that this will be
the guiding spirit for this examination, and hopes that as a result it will be possible to resolve its
concerns and hence to reach a positive decision on the waiver request.
Costa Rica presents below some comments and questions without prejudice to its rights in the
WTO, and therefore reserves the right to submit further comments and questions in future.
COMMENTS AND QUESTIONS1. In the sixth preambular paragraph to the PA  waiver request, document G/C/W/187/Add.2,
reference is made to the preferential treatment for products originating in ACP States, as required by
the PA, which is designed to "promote the expansion of trade …".  With regard to trade in bananas, a
sector in which these countries clearly do not have comparative advantages, this objective would
cause permanent injury to the efficient banana-p roducing countries, such as some of the Latin
American countries.  Why was the objective not included of maintaining the level of banana trade forACP countries during a certain period of time and then going on to a progressive reduction in
preferences and finally dismantling this discriminatory treatment?
2. Is it intended to dismantle the preferential treatment for bananas on the EC market and what
would be the time-frame for doing so?
3. Why have the applicants, in document G/C/W/187/Add.2, according to the modified version
circulated today, introduced in the penultimate preambular paragraph and in paragraphs 3 bis and
3 ter, mechanisms to ensure that preferential bananas do not experience a reduction in their market
when the tariff only stage is reached?G/C/W/324
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4. With regard to bananas, the EC carried out the tariffication process for non-tariff measures
that existed in various markets of its member States during the Uruguay Round.  Trade in bananas, as
in other agricultural products, must be included among the objectives of agricultural reform and hence
in the negotiations to be carried out, in which a substantial improvement in market access will
probably be a major objective.  It is a common and accepted practice that preferences should beeroded during multilateral negotiations.  Why does the EC seek to exclude the banana trade from
these principles and this reality which will probably apply to other agricultural products, even those
that underwent tariffication?
5. How do the applicants explain the commitment to promote preferential trade for ACP
countries set forth in the preamble to document G/C/W/187/Add.2 and the protection of their
domestic production, in relation to the objectives of continuing agricultural reform?
6. The anti-penultimate and penultimate preambular paragraphs of this document, as well as
paragraphs 3 bis and 3 ter, appear to seek to introduce guarantees for non-preferential producers so as
to ensure that they do not have reduced access as a result of the shift from the tariff-rate quota system
to the tariff only system through the GATT Article XXVIII procedures.  Trying to guarantee that the
more efficient producers will not lose market share when supposedly there is a move towards a freer
trade stage demonstrates that the system has serious contradictions.  Even if such a guarantee could beprovided through the proposed method, why do the applicants suppose that it should be satisfactory or
acceptable for efficient banana producers that, following a so-called transition period to a more open
system, the result should be to maintain trade levels , in other words, a ceiling on their exports, which
are certainly already limited?
7. If it is difficult for efficient producers to accept this result, this will be even more true during
or after a round of negotiations that includes the continuation of agricultural reform.  If
paragraph 3 bis is unsatisfactory, as has been made clear, what is the purpose of proposing guarantees
under paragraph 3 ter?
8. The paragraphs that have just been proposed, amending document G/C/W/187/Add.2, do not
resolve the problem of having to decide on a waiver  until the year 2008 without having a clear view of
the conditions of the regime that will be applied as from 2006, and the assurances given are not
satisfactory:  why do the waiver applicants not accept that the waiver should govern trade in bananas
until 2006, which is the period for which there is some certainty as to the conditions that would apply?
9. The EC Uruguay Round schedule of market-access commitments on agriculture includes the
1994 Banana Framework Agreement (BFA).  The wa y in which some of the provisions of that
Agreement were applied were condemned by the latest Panel on the EC banana regime.  Those
commitments could be applied differently, according to the adopted conclusions andrecommendations, and therefore those obligations remain.  Other BFA obligations have never been
questioned, and therefore also remain binding on the EC.  These include the obligation that the quota
allocated to non-preferential producers should be increased "… in accordance with any increase
resulting from the expansion of the Community".  Following the accession of Austria, Finland and
Sweden, the EC failed to co mply with this commitment and created an autonomous quota of
353,000 tonnes.  This is recognized in Regulation (EC) No. 216/2001 which states that it was "opened
to cater for the increase in consumption result ing from enlargement of the Community in 1995".
When will the EC bring this situation into confor mity with its obligations stemming from the first
paragraph of the BFA?
10. How will the EC comply with this BFA obligation when new member States join?
11. Can the applicants confirm that any other type of growth of demand for bananas on the EC
market will be reflected in an increase in the A and/or B quotas exclusively?G/C/W/324
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12. Article 18 of Regulation (EC) No. 216/2001 deal s with the EC's obligation under the BFA to
allocate tariff quotas to certain Members under the conditions adopted by the Dispute Settlement
Body (DSB).  What mechanism will the EC use to comply with this obligation?
13. A number of Latin American banana-exporting countries have indicated to the EU that
maintaining different tariffs for preferential and for non-preferential bananas in the A and B quotasunnecessarily penalizes non-preferential exporters.  Could the applicants explain why they have
maintained a tariff of 75 Euros per tonne for the A and B quotas for non-preferential bananas?
14. Do the applicants foresee that ACP countries may make use of the A and B quotas?
15. How was the volume of the C quota defined and why is it requested that it should be
exclusively for ACP bananas?
16. Please explain how the measures which the applicants wish to have covered by the waiver for
Article XIII of the GATT 1994 will operate.
17. Why is a different tariff rate established for non-preferential bananas even within the quota
reserved for preferential bananas?
18. If, during the tariff-rate quota stage, increases in demand for bananas are reflected in
increases in non-preferential banana exports, and taking into account that the draft request aims to
guarantee that there will be no reduction in market access conditions in the second stage, whatmechanism has been provided for to ensure that in this second stage the increase in demand will
exclusively benefit the exports of the more efficient or non-preferential banana producers?
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