By Brian Johnson - 2nd August 2005
Brussels has lost a WTO ruling over plans to shake up the EU’s banana tariff regime with Latin America.
The EU had hoped to replace its current banana import system, based on a complex combination of quotas and tariffs with a new regime offering a single tariff of €230 per tonne for Latin American imports.
The new set-up was also expected to safeguard banana exports from the EU’s former colonies, including some of the poorest countries in the world, the African, Caribbean and Pacific group (ACP), who would be exempt from import duties.
But a WTO arbitration panel on Monday backed a complaint by nine Latin American countries, that the new regime would have a negative impact on their exports.
Ecuador, Venezuela, Columbia, Brazil, Guatemala, Nicaragua, Panama, Honduras and Costa Rica claimed the new regime would have a “devastating effect”.
The arbitration report said that the proposed tariff “would not result in at least maintaining total market access” for Latin American banana suppliers.
Reacting to the decision, Brussels trade chief, Peter Mandelson said the tariff that had been proposed was a “neutral and fair conversion” and promised to start immediate discussions to resolve the impasse.
“We remain committed to follow the procedures established…in Doha in 2001 as the best means to facilitate a solution to the longstanding banana saga,” said Mandelson.
The European Commission also said in a statement that it expected consultations to begin within ten days with the nine Latin American countries, but warned that it expected “constructive engagement.”
“The intention remains to have a tariff only system in place on 1 January 2006.”
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