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Banana wars

December 4, 2009

Ink could be put to a deal that would end one of the World Trade Organization's longest-ever trade disputes: the four-way tug of war over Europe's banana imports.

File photo of bananas on display
The deal would be a victory for major banana distributing corporationsImage: AP

The deal, which is reportedly all but signed, ends a 16-year dispute at the World Trade Organization (WTO) between the European Union and Latin American countries.

It requires the EU to cut its tariffs on Latin American bananas in return for immunity from further legal action at the WTO.

"Everybody is on board. The last obstacles have been cleared…allowing for an initialing of the deal on Friday," the Reuters news agency quoted a diplomat involved in the negotiations as saying.

Bending the rules

Since 1993, the EU has officially discriminated against Latin American growers, favoring bananas from former European colonies in Africa, the Caribbean and the Pacific - a block known as the ACP states.

The United States has been the other major party to the four-cornered dispute, because several big banana distributors such as Chiquita, Dole and Del Monte are US corporations.

Latin American bananas currently carry tariffs of around 115 euros ($173) per ton. Under the breakthrough agreement, those tariffs are to fall to around 75 euros per ton by 2014.

Crucial export

The less competitive, and generally poorer, ACP states haven't had to pay the tariffs to sell their bananas in the lucrative European market. They are to be compensated with 200 million euros, according to media reports. The banana trade is vital to many Caribbean economies.

On Wednesday, EU Agriculture Commissioner Mariann Fischer Boel said she expected a deal at the talks in Geneva "by the end of the week," thanks to increased attention from the US and a willingness to compromise on behalf of ACP states.

An agreement would also remove one of the stumbling blocks in the WTO's stalled Doha Round of free trade talks.

nw/Reuters/AFP

Editor: Sean Sinico

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