The Tariff-Only Import Regime for Bananas in the European Union: Is Setting the Tariff at Right Level an Impossible Mission?

The European Union is bound by World Trade Organisation agreements to move to a tariff-only import system for bananas by no later than 1 January 2006. From that date, imports from non-ACP countries will be subject to a single tariff while ACP country bananas will continue to enter the EU market duty free. This regime will replace the highly contested tariff-rate quota policy in place since 1993. This paper shows that setting the tariff at a level that maintain the status quo is an impossible mission given uncertainties on quota rent estimates and quota rent distribution.