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Proposed €230/t tariff. Market access implications for Latin American bananas. Loss of Latin American access under a €230/t tariff. Under a €230/t tariff, Latin America would face a definite loss of market access (Bananarama results)
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Proposed €230/t tariff Market access implications for Latin American bananas
Loss of Latin American access under a €230/t tariff • Under a €230/t tariff, Latin America would face a definite loss of market access (Bananarama results) • The most likely loss is 1.1 million tonnes (more than a third) (see next page) • However, under the worst case scenario, 2.0 million tonnes could be lost • A loss of 1.1 million tonnes would cost economies of Latin American exporters about $400m a year in lost income and over 75 000 jobs (GTAP results) • Latin American access would not ‘at least be maintained’, under the terms of the WTO ACP Waiver, making the proposed tariff illegal
Definite loss of market access 230 tariff -2.0 -1.1 -0.3 0 Mt Loss in market access Gain in market access Loss of Latin American market access with a €230/t tariff
Article XXVIII implications • Under GATT article XXVIII, the EU may be required to compensate eligible Latin American countries for the loss in trade estimated in the following table • Compared with free trade since 1992, under a €230/t tariff, the value of Latin American exports to the EU would be $1.2 billion a year less -- see table • Compared with a €75/t tariff since 1992, under a €230/t tariff, the value of Latin American exports to the EU would be $1.0 billion a year less -- see table
A €230 tariff would decrease Latin American exports by up to $1.2 billion a year relative to free trade or a €75 tariff since 1992