The future of some 50,000 banana industry workers and Cameroon’s trade balance is at risk, according to some experts and banana producers. With the forthcoming abandonment of the EU-ACP Cotonou Agreement on 1 July, many producers in Cameroon are wondering how they will survive international competition in a free market.
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Over recent years, improved cultivation methods have lifted Cameroon’s banana crop to 250,000 tonnes from around 80,000 tonnes in 1990. The fruit, the best selling in the world, accounts for 1.5% of the country’s GDP and until now, virtually all its entire banana crop was exported to Europe. With the implementation of the Cotonou Agreement between the EU as banana importer and the ACP (Africa, Caribbean and Pacific) producer countries, Cameroon was allocated a quota of 160,000 tonnes.
Formally known as the Lome Convention, the Cotonou Agreement was however technically branded a breach of international trade regulations as it gives preferential market access to ACP countries. The “dollar-banana” produced in the US is subject to EU import tariffs of €75 per tonne up to a maximum of 2.55m tonnes. Retaliatory measures by the US administration included trade sanctions and the liberalisation of the banana industry within the EU appeared unavoidable.
On 12 April 2001, EU and US officials reached a compromise that included an agreement to revise the Cotonou Agreement and remove the trade sanctions. This agreement is due to come into force on 1 July, and bring with it a 100,000-tonne reduction in the ACP import quota.
Import tariff preference will remain with ACP countries for a period of four years while other exporter countries pay €75 per tonnes for their share in the 2.6m tonnes quota, however after that period every country will have access to the market on payment of the tariff.
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By GlobalDataIn Cameroon, the prospect of competing within a free market is an uncertain one. The ministry of industrial and commercial development will join with producers and exporters to establish a rescue plan for the industry.
