EU 'on verge of solving' 16-year banana dispute
November 19, 2009
By Jennifer Freedman and Ryan Chilcote Geneva and Stockholm
The EU was "on the verge" of resolving its 16-year old dispute with Latin American countries over the bloc's import tariffs on bananas, Trade Commissioner Catherine Ashton said yesterday.
World Trade Organisation (WTO) judges have ruled more than half a dozen times that the EU's policy on banana imports breaks global trade laws by favouring producers in African and Caribbean nations over those from Ecuador, Costa Rica and Colombia.
The EU policy costs Ecuador e209 million (R2.3 billion) a year, according to the Association of Ecuadorian Banana Exporters.
Banana producers from Latin America must pay a duty of e176 a ton on shipments to the 27-nation EU, while no surcharge is imposed on imports of the fruit from former British and French colonies in Africa and the Caribbean.
An EU official said the draft agreement called for duties to be reduced over seven years to e114 a ton.
"We are on the verge of being able to try and resolve" the dispute, said Ashton. "We're not there yet, but we're nearly there, and this is very good news."
The EU buys 3.4 million tons of its 4 million tons of banana imports from Latin America a year. The fruit is the world's fourth most-valuable food crop, after wheat, rice and maize, according to the UN.
The WTO first ruled against the EU in September 1997, backing claims that were brought by Ecuador, Guatemala, the US, Honduras and Mexico almost two years earlier.
The EU promised to switch to a tariff-only regime for bananas no later than January 1, 2006, in return for the US ending $191m (R1.4bn) of sanctions on European goods in 2001.
In April last year judges agreed with Ecuador - where 10 percent of the population depend on bananas for their livelihood - that the EU had not honoured interim agreements or complied with past WTO rulings.
A judgment the following month supporting a US complaint against the EU's policy drew a similar conclusion.
Washington is backing the interests of Cincinnati-based Chiquita Brands International and California-based Dole Food, which grow and export bananas from Latin America.
The WTO has authorised Ecuador, the world's top banana exporter, to impose sanctions against the EU for its failure to implement the 1997 rulings. Brazil, Colombia, Costa Rica, Guatemala, Honduras, Mexico, Nicaragua, Peru and Venezuela have also threatened to seek WTO approval for sanctions against the EU.
Last July last year the EU and Latin American nations agreed on a gradual reduction of the import tariffs to e114 in 2016.
The EU then refused to implement the accord, saying that it should be tied to a global trade deal that is currently blocked.
The clash over bananas is the longest-running trade dispute brought at the WTO. - Bloomberg
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