26 June 1998
EU close to deal on bananas, olive oil and tobacco

EUROPEAN UNION (EU) farm ministers. meeting in Luxembourg, are close to a deal on reforms of banana imports, olive oil and tobacco regimes. They are also in agreement on the amount of arable land to be left fallow.

Germany and the Netherlands are holding back from supporting banana reform; Spain is seeking more concessions on olive oil; while France remains opposed to an increase in set-aside arable land to more than 8% of the total from 55%.

Negotiations to reform the banana regime follow a ruling by the World Trade Organisation that the existing regime is discriminatory. But changes under discussion are likely to fall short of the demands of US and Latin American producers.

Most EU countries still favoured a reform which would provide an additional level of support for African, Caribbean and Pacific (ACP) countries.

The olive oil proposals are controversial because they would involve imposing a ceiling on the level of subsidy each country can receive.

The tobacco proposals aim at the encouraging the plantation of higher quality tobacco. Northern states are holding out for higher subsidies.