TAKEN FROM:
http://www.bbc.co.uk/caribbean/news/story/2006/11/061109_bananatariff.shtml
A tariff imposed on Latin American bananans to the Caribbean and European Union seems to be doing its job after being implemented one year ago. A group from the EU and African Caribbean Pacific group is currently meeting to review a new tariff structure that will charge $225 U.S. dollars/tonne for Latin American bananas. EU officials claim that the newly implemented tariff system had increased banana imports into Europe and "had ensured a regular supply from ACP countries." Latin American producers are still opposed to the $225 U.S. dollar duty they must pay on exported bananans, but are in current negotiations with the EU to reduce the price.
"I think the tariff is just about adequate, because both the MFN (most favored nations) countries and the ACP varying degrees have been able to increase their exports to the market. So that suggest that the balance is probably just about right..." said Bernard Cornibert, banana official and head of the Windward Islands Banana Development and Exporting Company. Prior to the tarrif one year ago, Caribbean states were actually arguing for an even higher tariff, as they claimed imported Latin American bananas were diminishing their market share.
For Caribbean states, the implemented tariff actually strenghtens their economy because domestic producers are no longer competing against foreign producers (latin american). Bananas are also a vital part to the Caribbean economy, and the tariff keeps small family operations in business as well. The same situation could apply to any domestic producer facing foreign competition. Most often, these groups will be the ones to push for higher tariffs and quotas due to the fact both of these raise the domestic price and are good for business. After reading this article, it made me wonder if we had the same situation for imported bananas in the U.S.. Granted, the state of Hawaii does not produce enough bananas to support the U.S. population, but what would happen if Latin America and the caribbean had severe crop losses (from a hurricane let's say)? Would the U.S. be forced to import bananas from the ACP African nations?
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3 comments:
Hey Jo,
This a lot like my article, with protectionist policies and tariffs. I honestly think that if we spent more time worring about our economy and less time about protecting our workers we would be much better off. I would be upset too if i had to pay $225 to export!
Ash
I like your article joelle! to answer your question, if bananas were hurt in a hurrican i think we would be forced to export the fruit in from Africa because the demand for bananas is not going to go down.
I have no clue why this didn't show up when I looked before...maybe I was daydreaming and missed it - sorry, Joelle! it's changed in the gradebook now.
For your question - I think kate has it - although the prices would go up one way or the other.
Interesting - that the tariff is actually protecting the Caribbean countries. What a nice externality for them! (sorry, couldn't resist...) :) :)
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