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assumption of Cioffi and dell’Aquila (2004: 178) that the large increase in the MFN entry
price relative to the former reference price may have contributed to the decline of Moroccan
and Israeli orange exports to the EU. Instead, we show that a preferential entry price for
oranges originating in Israel and Morocco, which was equal to the former reference price, was
introduced concurrently with the implementation of the entry price system in December 1995.
Thus, Morocco and Israel had at no time to adhere with the MFN entry price for oranges.

Hence, factors beyond EU trade policy would appear to have caused the decline of the MED’s
orange exports to the EU. For example, market distance and product variety are of particular
importance for the decline of Israeli orange exports to Germany. German importers appreciate
the high flexibility with orange imports from Spain. Due to Spain’s proximity to the market,
Spanish produce is packed directly in nets in Spain and then transported by truck to retailers’
distribution centres in Germany within 2 days. In contrast, Israeli produce is first packed in
cardboard boxes in Israel, which are transported by ship within 4 days to Marseille (France).
The produce is then carried by truck to packing stations in Germany where it is repacked in
nets before it is brought to supermarkets. Of course, the resulting transportation costs are
lower for Spanish produce. Besides, Shamouti is the orange variety which still dominates
Israeli orange production. In Spain, new orange varieties were introduced, e.g. the Navel
varieties. German consumers prefer Navel over Shamouti oranges, but Israeli orange
producers did not manage to adapt to this change in consumer preferences in time.

It remains to determine the influence of EU internal market regulations and structural policy
on the large increase in EU orange market share of Spanish produce. EU orange production is
protected internally by e.g. processing aid and withdrawal compensation. Also, operational
programs of producer organizations for improvement of product quality and market
promotion activities are financially supported. Restructuring aids are granted to modernize
marketing structure and to grub up old orange groves. Additional funds are provided by the
EU’s Cohesion Fund e.g for enhancement of transport infrastructure.

Finally, all this implies that the liberalization of orange trade between the EU and the MED
countries, which could be realized in the course of the ongoing Barcelona Process, would
induce few, if any, trade effects. Theoretically, the entry price system would prevent
especially low qualities from entering the EU market. For oranges, however, we don't find
evidence from interviews with trading companies for potential low quality orange market
segments below the entry price level. Existing marketing standards for citrus fruits specifying
minimum requirements regarding e.g. fruit size, external appearance, uniformity etc. would
prevent inexpensive, low quality produce from entering the EU market, even if the EU entry
price system were removed.

Yet, as the results for mandarins demonstrate, these results cannot be generalized, not even
for citrus fruit imported from the MED countries. It is highly probable that the removal of the
entry price for mandarins would result in a decrease of the average EU import price level.
Table grapes, however, provide a second example for which the SIV of imports from the
MED is far above the EU entry price, and thus the entry price system is of little effect.

The conclusion that large parts of the EU external trade regime for oranges are redundant will
potentially be amplified by the current round of trade negotiations in the WTO. Negotiations
on market access will probably result in significant tariff reduction rates which would also
apply to the specific tariffs which are part of the EU’s entry price system. In implementing the
results of the Uruguay Round, the EU reduced entry prices by the same monetary amount as

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