Caribbean Banana Exports: US Stance (Hansard, 5 March 2001)

Lord Renton
My Lords, I tabled this Question some days before the Prime Minister's recent visit to the United States.
The Question was as follows:
Whether the Prime Minister, during his visits to the United States, will seek to persuade the Bush Administration to have a more flexible approach than its predecessor to the current dispute with the European Union over its banana import policy.

§ The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville)
My Lords, the Government have consistently urged all parties to the dispute to negotiate towards a rapid solution that will be acceptable under world trade rules and will address the needs of vulnerable Caribbean banana-exporting countries. It is for the European Commission to negotiate with third countries on behalf of the European Union on the banana import regime.

Lord Renton
My Lords, I thank the Minister for that reply and for the efforts that are being made to relieve the terrible poverty that has arisen in parts of the Caribbean through the inability to export bananas to the European Union. Will he impress on the United States, which is the most prosperous country in the world and whose co-operation is needed to achieve agreements, that if it does not agree, it will cause continued poverty and confusion in the Caribbean?

§ Lord Sainsbury of Turville
My Lords, we have consistently impressed on the United States that we have commitments to the Caribbean islands and that if the issue is not resolved the impact on them will be devastating. We shall continue to stress that.

§ Lord Shore of Stepney
My Lords, no doubt most of us sympathise with the Caribbean banana-producing countries. However—my noble friend will correct me if I have got this wrong—has not the dispute been to the highest levels of the World Trade Organisation's appeal machinery and has it not twice been ruled that the European Union is legally in the wrong? If so, on what basis can we continue the argument with the United States? Is it simply that we do not trust the appeal machinery and impartiality of the World Trade Organisation? I hope that that is not the case.

§ Lord Sainsbury of Turville
My Lords, the noble Lord is right: the World Trade Organisation has twice ruled in favour of the United States on the issue. That is why we continue to look for a solution in line with the WTO regulations that also takes account of the fact that we are dealing with very vulnerable 9 Caribbean countries. If they are not able to produce bananas, the effects on their economies will be dire. The social consequences of that would not be in the interests of those islands or, ultimately, of the United States of America.

§ Lord Redesdale
My Lords, does the Minister agree that the sanctions that were threatened by the United States put in jeopardy the existence of the Scottish cashmere industry? The Americans do not grow any bananas themselves, but it appears that American lobby organisations pushed their government to fight on the issue.

§ Lord Sainsbury of Turville
My Lords, clearly one of the retaliatory actions taken by the United States was against the cashmere industry. The Government helped that industry at a time when the action was unauthorised by the WTO. The action is, of course, now authorised by the WTO. Although one may not agree with the actions of the Americans, it is perfectly legitimate that they support American companies which grow bananas and which believe that they are being unjustly treated by this regime.

§ Lord Palmer
My Lords, does the Minister agree that a worrying issue in relation to the ACP producers is that, if they were to diversify, it would be into illegal substances? Surely that is the worst thing that any country in the world would want to see happen. In asking this question, I declare an interest as a residual beneficiary of a Caribbean banana plantation.

§ Lord Sainsbury of Turville
My Lords, I believe that the noble Lord is quite right. As I said, the social consequences would be devastating. Although it was not spelt out, clearly one worrying result would be that the areas into which they diversified would not be socially desirable.

§ Baroness Trumpington
My Lords, is the Minister aware that, when I replied on behalf of agriculture on this subject, it was without doubt the most difficult part of my portfolio? Can he tell me whether the European Union is speaking with one voice? In the past, Germany ate only dollar bananas and was not at all helpful towards us. Also, what is the state of the Lomé Convention?

§ Lord Sainsbury of Turville
My Lords, as always with regard to these complicated negotiations, there is a range of views as to what is the best way forward. As a government, we voted against the previous proposal on this matter because we considered that it would neither resolve the situation nor deal with the vulnerabilities of the Caribbean islands. There is a range of views as to what is the best way forward. I believe that that is natural if a range of countries is engaged in the negotiations. So far as concerns the Lomé Convention, that has now been taken over by the Cotonou agreement. We have responsibilities under that agreement.

§ Lord Faulkner of Worcester
My Lords, although the support for Caribbean banana growers, which is 10 evident in all parts of the House, is very welcome, is my noble friend aware that not only is the proposed legislation put forward by the EU Commission in December for a tariff quota system on a first-come. first-served basis in defiance of the Cotonou agreement, but that it would have the effect of wiping out almost entirely the Caribbean banana growers because undoubtedly it would favour the larger dollar importers? In his dealings with the Commission, will he do his utmost to put forward proposals for a tariff system based on past trade? That would at least give the Caribbean growers some chance of retaining a foothold in Europe.

§ Lord Sainsbury of Turville
My Lords, as I said, we voted against the proposal described as the "first-come, first-served" system because we felt that it would neither resolve the issue nor protect the Caribbean exporting countries. We felt that we had to vote against it because it would not achieve the desired ends. There are, of course, other ways forward, one of which is an historical licensing basis. Negotiations have taken place in relation to that. Therefore, other alternatives exist.

Lord Renton
My Lords, is not the attitude of the European Commission flexible enough to help in this matter? However, does not the final solution depend upon the co-operation of the new government of the United States, who seem to be most anxious to co-operate with us when possible?

§ Lord Sainsbury of Turville
My Lords, clearly the co-operation of the United States is absolutely essential if we are to obtain a resolution of this matter which, as I say, meets our twin objectives of protecting the islands and doing so within the regulations of the World Trade Organisation.

§ Lord Elton
My Lords, do we still have a special relationship and, if we do, is this not the time to make use of it?

§ Lord Sainsbury of Turville
My Lords, we have consistently discussed this matter at the highest level with the United States. We shall continue to urge the US to be flexible in resolving the issue.