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Banana Splits and Policy Changes - Term Paper Example

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The current term paper "Banana Splits and Policy Changes" highlights the impact of policy changes on the banana trade from the ACP states to the EU. It discusses the historical background of the banana trade that is based on strong ties between ACP and EU nations since the 1980s…
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Banana Splits and Policy Changes
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Download file to see previous pages Up until the 1950s, sugar of the Windward Islands was a major source of foreign revenue for the Caribbean agricultural producers and then bananas took the prominent place (Ford, Dellaquila, & Conforti. 191). The Banana producers of the Caribbean have enjoyed significant benefits in the form of trade preferences. These trade preferences enable the banana producers to charge premium prices and avail implicit income transfers in the European markets (Haines, Cashin and Mlachila 3). According to the Technological Modernization of the Banana Industry in the Caribbean (16), the seven banana producing countries in the Caribbean are1:
Over the years there have been many reforms in the European Union that have eroded the concept of preferential treatment and implicit income transfers in favor of a more free market economy. The Caribbean countries are now facing global competition in the European market and are finding it exceedingly difficult to stay competitive and meet the employment and food security needs of their rural population.
The Treaty of Rome allowed for the allocation of quota and tariff for banana imports for non-ACP countries (Ford, Dellaquila, & Conforti. 192). Main reasons for the preferential treatment of EC towards the ACP Banana producers (Ford, Dellaquila and Conforti 192):
Thirdly they were a developing nation that applied traditional methods of harvesting; producing and marketing. Their bananas had a high cost of productions and did not have the economies of scales like the ones from the United States did (Clegg 28).
United Kingdom managed to retain their banana trade regime with ACP following their accession to the EC but these close ties between UK and ACP were greatly affected by their dominant role in the EC (Clegg 27)
By 1980 the EC concluded that inefficiencies that existed in the trade barriers between the EC members were costing the EC competitive edge over Japanese and US economies. ...Download file to see next pagesRead More
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