• by IPS Correspondents (brussels)
• Tuesday, December 13, 1994
• Inter Press Service

BRUSSELS, Dic 13 (IPS) - A senior European Union (EU) official said Tuesday that the European Commission is prepared to consider giving compensation to third countries whose exports will be squeezed when Austria, Sweden and Finland join the EU next year.

So far, only the United States has made official complaints to the EU about losses incurred when tariffs to the markets of the three new members will be raised to fall in line with trade policy of the EU Customs Union.

Paragraph 6 of Article XXIV of the General Agreement on Tariffs and Trade (GATT) requires such compensation negotiations on enlargement of any Customs Union around the world.

"We do not accept that a duty increase, in itself, automatically results in a serious effect on trade. It has to be looked at on a case-by-case basis," said the EU official who added that this was GATT policy and that of its successor, the World Trade Organisation (WTO).

There are also stirrings in Japan, said an EU official, who noted that Iceland too is worried about its future sales of herrings. But the official said that no complaints had been received to date from any developing country in Latin America, Asia or Africa.

"The procedure has kicked off with the United States who were eager to get their hand in early," said the official, adding: "We are open to negotiations with any trade partner."

Complaints are unlikely to come from the 70 African, Caribbean and Pacific nations who are party to the EU's aid and trade pact -- Lome IV. This allows for more than 90 per cent of goods and produce traded under Lome's arrangements are free from duties.

Lome's liberal terms will be extended to include Sweden, Finland and Austria when they become part of the EU on Jan 1, 1995.

But a future loss is in store for Latin America on banana exports, predict Latin American diplomats here. The three new EU member countries import annually between them some 400,000 tonnes, the bulk from Latin America, and duty-free.

Although the EU will raise its 2.2 million tonne banana import quota for Latin America next year, the three new members will come under EU's banana tariff regime for Latin America of 75 European Currency Units (90.75 dollars) per tonne.

One Latin America diplomat here predicted there will "surely" be complaints from Latin American banana producers about compliance effects of EU enlargement on their export receipts.

© Inter Press Service (2014) — All Rights Reserved. Original source: Inter Press Service

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