The Common Market Organisation (CMO) for bananas in the European Union sets a tariff quota for Latin American and non-traditional ACP (Africa, Carribean and Pacific countries) bananas. Import rights are allocated between A operators (who imported dollar bananas in the pre-CMO regime) and B operators (who imported ACP and European fruits in the pre- CMO regime). In this paper, we develop an analytical framework which allows us to define the equilibrium characteristics on both the banana market and the import rights market. The model takes into account the market power potentially exerted by A operators on these markets.
