Economic policies

The EC banana regime, GATT/WTO challenges, and the evolving policy framework
The "Everything But Arms" initiative
International banana market access
International cooperation on bananas
Exporting countries national policies

The EC banana regime, GATT/WTO challenges, and the evolving policy framework

Policy changes in major importing countries have had major impacts on the world banana economy. This section reviews the many developments that have occurred in the European Union (EU) concerning bananas.

Import arrangements in the EC member States prior to 1993

A variety of import regimes existed in Europe prior to the introduction of a Common Market Organisation (CMO) for bananas on 1 July 1993:
- Germany had a special arrangement, set out in the banana protocol of the Treaty of Rome, permitting duty-free imports of third-country bananas reflecting the level of estimated consumption.
- By way of exception, a number of countries (France, Greece, Italy, Portugal and the United Kingdom) restricted imports of banana by means of various quantitative restrictions and licensing requirements, and gave preferential access to traditional suppliers. The French market was supplied principally from the overseas departments of Guadeloupe and Martinique, with additional preferential access granted to the ACP States of Côte d'Ivoire and Cameroon. A major part of Portuguese supply came from Madeira, the Azores and the Algarve, with additional volumes being imported from Cape Verde and any remaining requirements being imported from third countries. The United Kingdom granted preferential access to bananas from the ACP States of Jamaica, the Windward Islands (Dominica, Grenada, St. Lucia and St. Vincent and the Grenadines), Belize and Suriname. The Spanish market was almost exclusively supplied by domestic production from the Canary Islands. Italy offered preferential access to bananas from Somalia.
- The other countries did not apply quantitative restrictions and used a 20 per cent tariff as the sole border measure. These countries almost exclusively imported bananas from Latin America.

The EC's common organisation of the banana market (1993)

On 1 July 1993, the (then) European Economic Community (EEC) introduced a common market organisation for bananas (Council Regulation (EEC) 404/935, hereinafter "the Regulation"), replacing the various national banana import systems in place in the member States previously. Subsequent European Communities' (EC) legislation, regulations and administrative measures implemented, supplemented and amended the 1993 regime (refer to: Activities of the European Union, Summaries of legislation, Bananas).

The common market organisation for bananas consisted of a set of rules aimed at ensuring:
- free movement of bananas within the Community and implementation of common arrangements for trade with third countries.
- preferential outlets for bananas from the ACP States (in line with the Fourth Lomé Convention, which required that the ACP countries would be able to maintain at least their historical position on the Community market).
- protection to Community producers.

The EC's initial import regime included the following features:

A) Categories of banana imports

Title IV, which regulated trade with third countries, envisaged 3 categories of banana imports:

Source : Article 15.1 of Council Regulation (EEC) 404/93 (as amended) and the Annex thereto

B) Tariff treatment and quantitative aspects (including country-specific allocations)

• Allocations for duty-free banana imports from ACP countries

Imports of bananas from the twelve traditional ACP countries entered duty-free up to the maximum quantity fixed for each ACP country (see table below, which also includes allocations for non-traditional ACP countries).

Allocations for duty-free banana imports from ACP countries

Source : Traditional quantities as set out in EC Regulation 404/93; Non-traditional quantities as set out in EC Regulation 478/95.

Traditional ACP allocations were not bound in the EC Schedule, and there was no provision in the EC regulations for an increase in the level of these quantities.

• Non-traditional ACP and third-country imports

i) The "basic tariff quota"

Imports of non-traditional ACP bananas and bananas from third countries were subject to a tariff quota (referred to as the "basic tariff quota") of, originally, 2 million tonnes (net weight), then increased to 2.1 million tonnes in 1994 and to 2.2 million tonnes as of 1 January 1995 (quantities bound in the EC Uruguay Round Schedule). The tariff quota could be adjusted on the basis of a "supply balance" to be derived from production and consumption forecasts prepared in advance of each year. In 1995, a volume of 353,000 tonnes was added to the tariff quota as a result of "consumption and supply needs" resulting from the accession of three new EC member States, Austria, Finland and Sweden (not bound in the EC Schedule). In practice, the EC's tariff quota for non-traditional ACP and third-country banana imports was increased to 2.553 million tonnes.

The EC applied the following tariffs to these banana imports:

- Non-traditional ACP bananas: Duty-free up to 90,000 tonnes, divided into country-specific allocations and an "other ACP countries" category (refer to the allocations for duty-free banana imports from ACP countries); ECU 693 per tonne for out-of-quota shipments in 1996/97.

- Third-country bananas: ECU 75 per tonne up to 2.11 million tonnes as provided in the EC Schedule. An additional 353,000 tonnes were made available in 1995. Country-specific allocations were made for countries party to the Framework Agreement on Bananas (BFA), plus an "others" category (table below on BFA allocations); ECU 793 per tonne for out-of-quota shipments in 1996/97.

ii) The Banana Framework Agreement (BFA)

Five Latin American countries (Colombia, Costa Rica, Guatemala, Nicaragua, and Venezuela) first lodged a formal complaint in the GATT in 1993, claiming that the EC banana regime infringed fundamental GATT disciplines. The panel found against crucial elements of the EC regime, but its ruling was rendered inoperative since Community and ACP members opposed to it (under former GATT rules and practice, a panel report was only enforceable if adopted by consensus). The issue was settled by negotiation. Under the deal, known as the Banana Framework Agreement (BFA), four out of the five complaining parties (Costa Rica, Colombia, Nicaragua and Venezuela) agreed not to bring any further complaints or to press for the adoption of the panel report.

In return, under the terms of the BFA the EC allocated in its Schedule specific shares of the bound tariff quota of 2.1 million tonnes in 1994 and 2.2 million tonnes in 1995, as follows:

BFA allocations under the bound tariff quota for third-country
and non-traditional ACP banana suppliers

Source : Framework Agreement on Bananas, Annex to Part I, Section I-B (tariff quotas) in Schedule LXXX - European Communities.

Furthermore, as a result of the BFA, 90,000 tonnes of the "basic tariff quota" referred to above were reserved for duty-free entries of non-traditional ACP bananas. By regulation, the EC allocated this import volume largely among specific supplying countries (allocations for duty-free banana imports from ACP countries).

The BFA also provided that, if a BFA country was unable to deliver the quantity allocated to it, the short-fall would be reallocated amongst the other BFA countries (i.e. at the exclusion of other suppliers) in accordance with their percentage shares (the "tariff quota reallocation rules").

Overall, the BFA significantly reduced the protection afforded to the ACP states, but also aggrieved the position of those Latin American countries who were not party to the agreement (notably, the case of Ecuador).

C) Licensing requirements (imports of both non-traditionalACP/third-country bananas)

A particularly complex licensing system was established for imports of dollar and non-traditional ACP bananas at in-quota rate, as follows:

i) Allocation of licences based on three operator categories

Import licences were distributed among three categories of operators based on quantities of bananas marketed during the latest three year period for which data were available.

Operator category rules
(in-quota imports of non-traditional ACP and third State bananas)

Source: Article 19 of Council Regulation (EEC) 404/93 (as amended) and Article 2 of Commission Regulation (EEC) 1442/93 (as amended).
Note: Category A and B licences were transferable among operators, including to operators in Category C (transferred licences were taken into account in establishing reference quantities).

ii) Allocation of licences according to three activity functions

In order to qualify as Category A and/or B operators, economic agents were asked to perform at least one of the "activity functions" set forth in the table below during the rolling three-year reference period (i.e. the period determining their reference quantities; for 1993, the years 1989-91). Individual allocations were weighted by the type of commercial activity of the operator.

Activity function rules
(in-quota imports of non-traditional ACP and third-country bananas)

Source:Commission Regulation (EEC) 1442/93 (as amended), Article 3.

WTO disputes concerning the EC banana regime and the evolving policy frameworks

European Communities — Regime for the Importation, Sale and Distribution of Bananas (DISPUTE DS27): Summary

The Panel was established on 8 May 1996 to consider a complaint by the United States, Ecuador, Guatemala, Honduras, and Mexico against the EC regime for the importation, sale and distribution of bananas (Council Regulation (EEC) No. 404/93 of 13 February 1993, and subsequent EC legislation, regulations and administrative measures).

The EC submitted that the United States had "no legal right or no legal or material interest" in the case that it had brought, since the United States had only a token production of bananas and had not traded in bananas with the EC. The Appellate Body held that a Member has broad discretion in deciding whether to bring a case against another Member. Overall, Members have a stake in enforcing WTO rules since any deviation from the negotiated balance of rights and obligations is likely to affect them, directly or indirectly.

The ACP countries, which had most at stake in the proceedings (Caribbean States were heavily dependent, more than any others, on banana exports to the Community; yet they could not compete without the protection afforded by the EC regime), were granted third-party status.

Main factual aspects

The dispute concentrated on two elements of the EC's common organization of the banana market:

- Country-specific allocations of tariff quotas (allocations for duty-free banana imports from ACP countries; BFA allocations under the bound tariff quota for third-country and non-traditional ACP banana suppliers), as well as the "tariff quota reallocation rules";

- The EC licensing procedures for third-country bananas and non-traditional ACP bananas, particularly the operator category rules and the activity functions rules.

Some inconsistencies arising from the adoption of quantitative restrictions and from the preferential tariff treatment granted to ACP bananas were covered by the Lomé waiver.

The Lomé IV commitment and the Lomé waiver

Source: Protocol 5 on Bananas annexed to the Fourth ACP-EEC Convention (OJ L 229 of 17/08/1991, p. 3); GATT document L/7539 of 10 October 1994 and L/7539/Corr.1).

Findings and conclusions

The main Panel's findings and conclusions, as rectified by the Appellate Body, were as follows:

- The allocation (and reallocation) of tariff quota shares to some, but not to other, Members not having a substantial interest (i.e. not accounting for a significant export share) in supplying bananas to the European Communities was inconsistent with the GATT principle of non-discrimination. In some details:

- Some aspects of the EC licensing scheme burdened and discriminated against imports from Latin America, in that it created highly unfavourable conditions of competition compared to the simple arrangements for traditional ACP bananas (therefore violating GATT rules). In particular,

- The EC licensing procedures were also discriminatory under the GATS, in that they created advantages for European operators, and in fact discriminated against like service suppliers from Latin America. Specifically,

*The European Communities has made a full commitment for wholesale trade services (CPC 622), with no conditions or qualifications, in its Schedule of Specific Commitments under the GATS.

The new EC banana regime

The new banana import regime in the EC was conceived as a two-step process towards a tariff-only regime (to be implemented no later than 1 January 2006).

Against the background of the Cotonou Agreement, two new waivers were adopted at the Doha Ministerial Conference in November 2001, inter alia, to facilitate implementation by the European Communities of the Understandings on Bananas:
- The first waiver (from GATT Article I:1) allowed the Community to grant preferential tariff treatment for products originating in ACP countries.
- The second waiver (from GATT Article XIII:1,2) allows the temporary global quota allocation for ACP countries (C quota).

A) Transition period (from 1 July 2001 to 31 December 2005)

During the transition period (2001-2005), bananas were imported into the EC under a tariff-rate quota system through import licenses distributed on the basis of past trade. This transitional tariff-rate quota system, effective from 1 July 2001, was itself divided into two phases.

i) Step I, phase I (effective 1 July 2001, through 31 December 2005)

Interim tariff quota regime - Phase 1

Source: Council Regulation (EC) No 216/01 of 29 January 2001 (OJ L 31 of 02/02/2001, p 2).

A bound tariff-rate quota (quota A) and an autonomous tariff-rate quota (quota B) were set respectively at 2.2 million tonnes and 353,000 tonnes per year. These two volumes were in fact managed as one quota (A/B) and were not allocated among country suppliers. The tariff applied to banana imports within the quota A/B was 75 Euro per tonne with a tariff preference of 75 Euro per tonne granted to ACP bananas. The tariff applied within quota C (850, 000 tonnes, open to all country suppliers) was 300 Euro per tonne, with a tariff preference of 300 Euro per tonne granted to ACP bananas.

ii) Step I, phase II (effective 1 January 2002 to 31 December 2005)

Throughout this phase, the provisions applying to phase I continued except for the following changes:

- The autonomous tariff-rate quota B was set at 453,000 tonnes (an increase of 100,000 tonnes with respect to phase I); the additional tariff-rate quota C was set at 750,000 tonnes (a decrease of 100,000 tonnes with respect to phase I) and reserved for bananas of ACP origin;

- Following the accession of new countries in 2004, the European Communities enlarged the autonomous, unbound B quota (adding 300,000 tonnes for the period 1 May 2004 - 31 December 2004; in 2005, the additional quantity was fixed at 460,000).

Overview of results:

Source: Eurostat (data retrieved on 20 and 22 July 2005)

Evidence suggests that the tariff preference of EUR 75 per tonne granted to ACP bananas within the A/B quota had not been sufficient to offset the competitive margin enjoyed by dollar zone bananas (hence, the A/B quota have been effectively allocated to dollar bananas). The tariff of EUR 300 per tonne (versus nil duty for ACP bananas) had been too high to allow dollar banana imports within the C quota throughout phase 1 (hence, the C quota was in practice reserved for ACP bananas). The out-of-quota levy had in fact inhibited imports outside the framework of the tariff quota.

B) Towards a tariff only system and a reform of the internal aspects of the common organisation of the market in bananas

On 1 January 2006, pursuant to the agreement concluded in 2001 with the United States, the European Union substituted a tariff-only regime for the previous system of import quotas by region of origin.

In a communication dated 31 January 2005, the European Communities had notified its intention to replace its concessions on bananas with a bound duty of EUR 230 per metric ton. The proposed new duty and the methodology on which it was based were challenged by a number of Latin American countries. This WTO arbitration was initiated pursuant to the procedures set out in the Annex to the Waiver Decision with respect to Article I of GATT 1994 contained in the document "European Communities – The ACP-EC Partnership Agreement, Decision of 14 November 2001" (the "Doha Waiver"). Eventually, the Arbitrator determined that the envisaged rebinding for bananas would not result in at least maintaining the effective opportunities to enter the EC banana market afforded to MFN suppliers by the existing conditions of entry (Document WT/L/616 of 1 August 2005). Many Latin-American banana-exporting countries had urged a tariff of EUR 75 per tonne, whilst the ACP countries had called for a new single tariff of at least EUR 275 per tonne to offset the competitive margin enjoyed by dollar zone bananas.

On 12 September 2005, the EU presented a revised proposal in the light of the arbitrator’s award, for an import duty of EUR 187 per tonne for MFN suppliers and a tariff quota of 775,000 tons at zero duty for bananas originating in ACP countries. Again, on October 27, 2005, the WTO Arbitrator determined that the European Communities' proposed rectification would not result "in at least maintaining total market access for MFN banana suppliers", taking into account "all EC WTO market-access commitments relating to bananas" (download the report - Document WT/L/625).

Since 1 January 2006, the EU has been operating a new banana import regime. This imposes a single tariff of 176 euros per tonne on imports from third countries. ACP countries are allowed duty-free entry for a limited quota of 775,000 tonnes (but will be subject to the full duty rate outside that quota).

The management committee for bananas agreed on the arrangements for the administration of the new quota system for ACP bananas on 2 February 2006. From March to December 2006 quotas for the import of 468,150 tonnes of ACP bananas were made available on a "first come first served" basis in five tranches of 93,630 tonnes each. The remaining 146,850 tonnes were reserved for operators who actually imported bananas from ACP countries in 2005. It remains to be seen how this system for allocating licences will impact on actual pattern of ACP banana exports to the EU.

With the change of the import regime, a reform of the internal aspects of the common organisation of the market in bananas was launched. The preparation of the reform was entrusted to an interdepartmental steering group (ISG) made up of representatives of all the concerned departments of the European Commission. The ISG will analyse four options for the reform: the "no policy change" scenario ("Status Quo"); the integration of the banana aid scheme into the decoupled single farm payment regime ("Decoupling"); fixed envelopes, determined by country, to finance aid for producers ("Memorandum"); the transfer of financial resources from the CMO to the POSEI programmes for the agricultural sectors of the outermost regions ("POSEI"). Consultation document (Brussels, 3 April 2006)

For more detailed information on the EC banana regime and trade disputes concerning bananas, the reader is referred to:

- EUROPA website, Activities of the European Union - Summaries of legislation (common organisation of the market in bananas)
- EUROPA website, European Commission, Directorate General Trade (overview of bananas dispute)
- EUROPA website, European Commission, Agriculture and Rural Development Directorate General (CAP reform)
- The US mission to the EU (EU-US bananas dispute)
-UK Department of Trade and Industry, DTI's Website for Europe & World Trade (bananas)
- Congressional Research Service, Report for Congress (The US-EU Banana Dispute)
- FAO, Intergovernmental Group on Bananas (an assessment of the new (April 2001) EC regime)
-Caribbean Banana Exporters Association
- Technical Centre for Agricultural and Rural Cooperation ACP-EU - Bananas

To retrieve the official documents:

-WTO, Documents Online database:
Click on "Simple Search" and search for documents by "Document symbol" (you can type the symbol search criteria directly in the field).
- Online editions of the Official Journal of the European Union:
Access by year and search by OJ publication reference.

"Everything But Arms" initiative

Trade disputes are not the only potential catalyst for policy reform in the banana sector. Also, the need to fundamentally change the EC banana regime would stem from the Everything But Arms (EBA) initiative. Adopted in February 2001, the EBA Regulation (Regulation (EC) 416/2001) grants duty-free access to imports of all products from least developed countries without any quantitative restrictions, except to arms and munitions. At present, 49 developing countries belong to the category of LDC's. Although imports of fresh bananas, rice and sugar are not fully liberalised immediately, duties on those products would be gradually reduced, with duty free access granted for bananas in January 2006, for sugar in July 2009 and for rice in September 2009.

See also:

• Everything But Arms initiative (Council Regulation (EC) No 416/2001 of 28 February 2001)
• The provisions of EBA have been incorporated into the GSP Regulation (Council Regulation (EC) No 2501/2001 of 10 December 2001)
• EBA User's Guide

International banana market access

An important factor related to banana trade is the issue of banana market access. There are different banana import regimes in different countries. Actually, the diverging banana regimes have fragmented the international banana market into open market areas and preferential market areas. Many banana importing countries maintain different forms of banana import regimes. According to FAO, there is a direct relationship between high import barriers of a tariff, TRQ (Tariff Rate Quotas) or regulatory nature and low per caput consumption of bananas. For more data on banana import regimes, see FAO Document CCP: BA/TF 01/8 Review of Banana Policy Developments. Another problem of market access is the application of sanitary and phitosanitary (SPS) measures to banana imports, because they may be understood by exporting countries by an additional barrier to trade. For example, in 2001 Ecuador expressed in the WTO context concerns about the use of SPS measures in Turkey to hamper trade .

International cooperation on bananas

International cooperation on bananas takes place in many forms and at different levels. Some interesting examples are the following:

Food and Agricultural Organization-Intergovernmental Group on Bananas and Tropical Fruits: Considered as the International Commodity Body on Bananas, it is the main forum for in depth discussion on issues related to the banana economy, its problems and their appropriate remedial measures. The Group provides a forum for consultation on and study of economic aspects of production, marketing, trade and consumption of bananas, with special reference to relations between consumption and prices, income, trade barriers and distribution systems, and the possibilities of increasing world consumption; study the efficiency and social aspects of the banana industry with particular emphasis on improvement of living standards of those engaged in the industry; study economic problems of the banana industry and make recommendations for marketing high-quality bananas at prices that are fair to both producers and consumers.

FAO established recently an ad-hoc working group on responsible horticulture production and trade with the purpose of facilitating dialogue, collaboration and joint activities among stakeholders working with social and environmental issues in horticultural production and trade. The participants in the Working Group have various backgrounds, including NGOs involved in standard setting, certification and/or labelling of horticulture produce, auditors and environmental experts, banana producers and FAO.

In addition, the Banana Forum service is provided by the Horticultural Products Group of FAO. The aim of the network is to exchange information on developments in the world banana industry and to discuss social, economic, trade, environmental and other relevant issues in banana production and trade .

Union of Banana Exporting Countries (UPEB) : UPEB is the international organization of the producing and exporting countries, which was created in 1974 with the idea of functioning as a cartel for bananas, in order to control banana supply and demand. However, it did not work out like that because of coordination problems and lack of enough financial resources. Member countries include Colombia, Costa Rica, Guatemala, Honduras, Nicaragua, Panama, Dominican Republic and Venezuela. The objectives of the organization were to expand markets and defend remunerative and fair prices for banana exports. The UPEB aimed to improve technical cooperation among member countries as well as to achieve marketing improvements for better developments of banana activity. During the nineties, as a result of different views and attitudes of member countries in relation with the EU Banana Regime, the role of UPEB was reduced. The fact that Ecuador, the first exporter did never become a member equally contributed to limit its influence. Under a cooperation agreement with IICA (Interamerican Institute for Agriculture Cooperation), it was transformed into a centre of information and documentation for member countries, avoiding intervention policies on prices or production. The UPEB was to become a discussion forum for Latin American banana producing countries, paying more attention to technical, environmental and social questions. Lately, some voices have been raised asking for a reactivation of UPEB as an organization uniting the interests of banana exporting countries with the objective of attaining social, economic and environmental sustainability of the banana activity in developing countries.

Caribbean Banana Exporters Association (CBEA): CBEA evolved from the Commonwealth Banana Exporters Association, which was formed in 1972 to bring together the Banana Growers' Associations in Jamaica and the Windward Islands, who were the traditional suppliers to the UK market. Following the Lomé Convention Agreement in 1975 the Commonwealth Banana Exporters Association changed its name to the Caribbean Banana Exporters Association (CBEA) and was expanded in due course to include Belize and Surinam. It established a London lobby in 1988 to defend its rights during pending trade discussions. The CBEA has been involved in campaigning against WTO rulings against the EU Banana regime.

Private Sector

International Banana Association: Founded in 1982, the International Banana Association (IBA) is a trade organization consisting of members engaged in the business of importing bananas into the United States. IBA provides a forum for members to discuss common and technical issues pertaining to banana production, distribution and marketing. IBA represents the interests of the banana industry in government relations and general promotions. The association works with government agencies to encourage a sound international business and regulatory climate for the banana industry. IBA also assists in the promotion of bananas to enhance public awareness of their health and nutritional qualities.

European Community Banana Trade Association is the European representative association of the banana trade in Europe. It was established in 1992 and its members are companies which are trading bananas on the European market. The association's main task is to represent unanimous views of members on aspects relating to the CMO on bananas, its overall framework and its detailed management rules. It is also a platform of information for members and provides them with regular updates on the coming developments on legislation.

Civil Society: the role of Non Governmental Organizations

During the nineties there has been an increasing participation of civil society in many aspects of life. Banana production has many environmental and social effects that are of concern for many people. As a result there are some NGOs directly involved in raising awareness on the banana sector and having an influence in increasing consciousness on the need to consume more organic and fair-trade bananas, as well as campaigning for a more environmentally and socially sustainable banana activity. An interesting example is Banana Link, a non-profit company limited by guarantee established in early 1996 to develop the work on the international banana trade started by Farmers' Link. It aims to alleviate poverty and prevent further environmental degradation in banana exporting communities and to work towards a sustainable banana economy. This is to be achieved by working co-operatively with partners in Latin America, the Caribbean, West Africa and the Philippines and with a network of European and North American organisations. Banana Link carries out research, provides educational services and disseminates information on the banana trade. It provides a specialised research and information service on trends in the international banana trade and on the activities of the companies involved, campaigns and lobbies, nationally and internationally, for a more socially and ecologically sustainable banana production and trade, works with and supports small banana farmers and plantation workers in producing countries and collaborates with other organisations working on similar issues in the rest of Europe and elsewhere. There are other European initiatives, grouped in Euroban, the European Banana Action Network, is a coalition of 30 European NGOs, working for a socially and environmentally sustainable banana trade. In the US, Rainforest Alliance is working in the Better Banana Project .

In 1998 took place a world conference bringing together all players in the global banana industry in search of a sustainable banana economy. The International Banana Conference was organized by IUF (International Union of Food workers) and its partners in the European Banana Network EUROBAN, including trade unions, transnational companies, governments, civil servants, scientists, fairtrade organizations and NGOs to discuss concrete measures "towards a sustainable banana economy". On the conclusions, the "International Banana Charter" was presented, as a basis for further discussion at all levels of the industry. The Charter defines the social, environmental and economic components of a future sustainable banana economy and outlines the potential role of social and environmental clauses in WTO agreements, freedom of association and collective agreements, corporate codes of conduct, fair-trade and reform of the European Union banana import regime in transforming the industry. After the Conference, there have been many voluntary initiatives trying to address social and labour issues in the banana industry. All parties share the objective of raising the standards of the people employed on plantations in banana exporting countries.

Exporting countries national policies

In order to protect the interests of national producers in their countries, governement have used different policies. In some cases, like in Ecuador or Costa Rica, they establish a minimum price to be guaranteed to banana producers. In other cases it is through a land policy that prevents foreign companies to take property of the land, like in Ecuador, where transnationals have not grown bananas because they did not have access to the land. In 1988, the Philippine Congress passed the Comprehensive Agrarian Reform Law (CARL). This law opened an opportunity for plantation workers to own plantation lands leased to or owned by transnational and big landowners-growers. Through this process workers could become owners of land but large companies continued marketing their bananas. Another possibility of governmental intervention in the banana sector has been the introduction of an export tax on bananas. In fact, one of the first measures taken by UPEB was the introduction of an banana export tax, which was strongly refused by transnational banana corporations, giving place to the first "banana war". In addition, in August 2002, in Costa Rica, following the difficult situation in the banana sector, the governement has established a guarantee fund, issuing bonds for a quantity of up to $75 million, in order to avoid the possibility of bankruptcy for independent growers.