World trade bosses have backed Latin American producers in the dispute over European Union plans to overhaul its banana import tariffs.
Trade sources said the World Trade Organisation’s arbitrators ruled that the planned €230 per tonne duty would hinder Latin American access to the EU market, Reuters reports.
The EU now has 10 days to present a fresh proposal for the tariff, which is currently €75, and end a row that could further complicate WTO negotiations on a global trade pact.
Under EU proposals, ACP countries would continue to get privileged access to the European banana market. But duties for others, including the world's largest producer Ecuador, would rise.
The system was created after Brussels lost a series of rulings in the late 1990s in what became known as the banana wars. The EU undertook to dismantle quotas decreed to discriminate against the Latin Americans and US-based fruit companies such as Chiquita Bands International and replace them with a tariff-based system from January 1, 2006.
But the Latin American countries argued the new rate violated the understanding that the changes should "at least maintain" their access to the EU market and said the proposed changes threatened hundreds of thousands of jobs in their countries.
At the same time, the ACP producers, with higher production costs, are calling for higher duty to allow them to compete.
Despite the WTO decision, analysts say the argument could continue until the end of the year, when trade ministers from the WTO’s 148 member states are supposed to agree a deal on lowering barriers to trade across the global economy.
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