The 16-year trade row between the EU and Latin American countries over bananas has finally ended, to the satisfaction of many of the parties involved and the dismay of others.
Meeting at the World Trade Organisation (WTO) in Geneva, ambassadors from the EU and Latin American countries agreed to end their dispute on Tuesday afternoon.
As part of the deal, the EU has committed to cut its import tariff on bananas in stages - from €176 (£156) a tonne to €114/t in 2017 at the earliest. It will make the biggest cut first, by €28/t, to €148/t next year.
In return, Latin American countries have agreed not to demand further cuts and the EU will not cut its tariff further once the Doha Round of talks on global trade resumes. The Latin Americans will also drop their cases against the EU and settle several legal disputes pending against the EU at the WTO, the oldest dating back to 1993.
The EU has also agreed to make some €190 million available for the main African and Caribbean banana-exporting countries as a banana adjustment measure (BAM), to help them face stiffer competition from Latin America.
European Commission president José Manuel Barroso said he was very happy with the breakthrough: “I am delighted that we have finally found a way to solve the bananas dispute with a compromise that works for all sides.”
New European trade commissioner Benita Ferrero-Waldner said the deal would be significant for wider international trade: “After years of tedious negotiations, the deal reached will provide an important push for progress in the Doha Round talks and for the multilateral trading systems in general.”
Ecuador’s ambassador to the EU, César Montaño, who initialled the deal this week, told freshinfo his country was pleased. He said: “Ecuador feels satisfied. We have been very critical of the EU banana import regime and although this agreement is not perfect, it really is an important advance and we are now at the start of a new process.”
But development and humanitarian aid commissioner Karel De Gucht appeared to be totally out of touch with the sentiment of Caribbean producers when he said: “This is the best possible deal we could achieve. It reconciles all parties’ legitimate interests. I know ACP producers will face challenges in adjusting to the new situation. But the EU will do its best to help. With a more stable environment, all stakeholders will be able to focus more on the improvement of production conditions in banana supply chains.”
Windward Islands’ grower leader Renwick Rose told freshinfo : “While we understand the need to deal with international trade rules, there are exceptional circumstances. In the Windward Islands, by the time we get to the €114/t tariff, the entire banana industry in the Windward Islands will have been destroyed. My fear is that people will be forced out of production long before any payment from the BAM kicks in. It is going to prove inadequate and will create severe social and economic dislocation.”
His comments were echoed by Gordon Myers, executive secretary of the Caribbean Banana Exporters’ Association. He said: “This will have severe consequences for Caribbean, and to a lesser extent, African banana exporters.”
The feeling worldwide, however, is that the banana business is entering a new global era given this week’s deal and the first meeting of the World Banana Forum under the auspices of the Food and Agriculture |Organisation in Rome last week.
Delegate Alistair Smith of lobby group Banana Link said: “The new spirit of dialogue that has broken out following the creation of the World Banana Forum is around social and environmental conditions at banana plantations all over the world. There is a sense that now this deal is behind us, people can focus on these crucial issues.”
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