This study´s approach regarding the EU´s banana policy took place against the background of a desired sustainable trade definition and was conducted on a comparative basis. In other words, deriving from the analysis of selected trading regimes, it was sought to determine how both the internalisation of environmental external effects as well as the socially responsible development in the exporting countries can best be realised. This resulted in the following insights:

  • In terms of primarily economic criteria, a customs based solution seems favourable at first; yet efficient implementation would have to rely on specific regulations introduced in the GATT framework, such as socially or environmentally differentiated tariff structures.
  • Quota regimes may offer certain benefits from a developmental policy perspective, though only over the short term, and should, as such, be thought of as a merely temporary solution. In order not to contradict sustainable development in the exporting country, quota schemes must provide a strong allocation mechanism, ideally ensuring rents to be completely retained by producers rather than being transferred to importers.
  • Theoretically, a auctioning-based distribution mechanism applied to importing licenses presents a market oriented alternative to the "grandfathering" practiced today. In order to prevent risks typically associated with auctions and to, at the same time, capture the interests of the smaller producers in the exporting countries a solution was modelled in this study based on "single unit" auctioning of import licenses. This type of auction trades single units of supply of the producers. Since this scheme explicitly respects the smaller producers´ interests and may require the least in terms of short-term implementation, it stands as a practical, possibly transferrable solution to the issue of fair trade of agricultural products from developing countries.

BanaFair e.V. , Gelnhausen , DE

Project duration

01.02.1998 - 31.05.1998

Project members

Suhita Osorio-Peters (Coordinator)