UPDATE 2 – End to 16-yr WTO banana wars seen Friday-diplomats

Deal to cut tariff on bananas from Latin America

Published on Reuters, By Jonathan Lynn and Darren Ennis, Dec 2, 2009.

GENEVA/BRUSSELS, Dec 2 (Reuters) – A deal to end the world’s longest running trade dispute over import tariffs on bananas is expected to be signed on Friday between the European Union and Latin American countries, diplomats involved in the talks said.

The deal to end the 16 year-old “banana wars” – which also includes African Caribbean and Pacific states (ACP) and the United States – will cut the tariff paid on bananas from Latin America and shield the European Union from further legal action at the WTO, which has condemned its import regime. 

“Everybody is on board. The last obstacles have been cleared and closure is expected in the next 24 hours allowing for an initialling of the deal on Friday,” a diplomat told Reuters.

The essential element was that the tariff on bananas would fall to $114 a tonne by 2016 from $176, with an initial cut to $148 …

… Diplomats said a compromise, or so-called “peace clause”, had been reached over an EU demand that the 27-nation bloc should be exempt from further legal challenges as soon as the deal is signed rather than when the tariff changes have been registered at the WTO.

Formal registration, known as certification, could take months or years if other WTO members challenge the new tariffs.

But under the peace clause, Latin American exporters have agreed not to launch any new disputes during the certification process if Brussels was implementing the deal as agreed, the diplomats said.

The deal — removing an obstacle to an eventual agreement in the WTO’s long-running Doha Round — is linked to a broader pact in trade in tropical products, such as rum, tobacco, sugar, arrowroot and cut flowers.

Concessions by Latin American banana exporters such as Colombia and Ecuador, plus an aid package from Brussels, will have persuaded the ACP countries to sign up to a deal that erodes their competitive edge in the lucrative European market.

Caribbean ministers said it remained to be seen how the aid would be divided up among ACP members with diverging interests.  (full text).

Links:

Secretariat of the African, Caribbean and Pacific Group of States ACP, Homepage;

ACP Migration Facility launched, Brussels, 27th October 2009.

Comments are closed.