Deal in Carib-EU banana war

The European Parliament on Feb. 3 approved a tariff deal with Latin American banana producers, bringing to an end a long-running trade war that also involved the Caribbean.

The Parliament voted to cut duties on Latin American bananas by 35 percent over six years, potentially improving the competitive edge of American banana conglomerates, such as Chiquita (CQB.N) and Dole (DOLE.N), over smaller growers in Africa, the Caribbean, Pacific (ACP) and the European Union (EU).

“This agreement is already being implemented provisionally and now needs final approval from the members of the World Trade Organization (WTO),” said the EU in a statement.

Once endorsed by the WTO later this year, the deal will mark a victory by the world’s largest banana producers in a near 20-year battle for cheap access to the EU, the world’s largest consumer of the fruit.

It is expected to persuade the United States and 11 Latin American countries, led by Ecuador, to drop a legal challenge accusing Europe of imposing illegally high tariffs to protect banana producers in its Caribbean territories and the Canary Islands, as well as in former colonies of member states.

The deal will cut duties on imports from Latin America to 114 euros (US$158) per tonne in 2017, from 176 euros at present.

The EU banana import regime, dating from 1993, had given duty-free access to mostly small producers in former colonies and imposed tariffs on Latin American bananas, most of which are produced by the large U.S. multinationals.

Since Latin American countries planning free trade agreements with the EU, such as Peru and Colombia, have already secured duty cuts to about 75 euros, the deal will primarily benefit Ecuador, which, in 2009, refused a trade pact with Europe.

ACP producers, who oppose the cuts, will retain their duty-free access to EU markets.

The bloc is also expected to boost its aid to the 10 ACP states: Belize, Cameroon, Cote d’Ivoire, Dominica, Dominican Republic, Ghana, Jamaica, St. Lucia, St. Vincent and the Grenadines and Suriname.

Those countries are getting EURO 200 million (US$274.1 million) in aid in the 2010 to 2014 period.

But Caribbean legislators want this to be extended to 2020 to help them to diversify their economies.

“The future for small banana producers and sustainable production is now even more uncertain,” said Catherine Greze, a Green Party EU lawmaker who voted against the motion.

She said funds for encouraging banana production could reduce the EU’s available budget for other development projects.

According to European Commission data, the EU imported about 4.8 million tonnes of bananas in 2008, worth a total of some 2.9 billion euros.

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