EU Disappointed By Banana Export Ruling

by Ulrika Lomas, for LawAndTax-News.com, Brussels

03 August 2005

Ruling on Monday, the World Trade Organisation rejected the European Union's plans to change its banana tariffs.

Under the proposed new regime, which was planned to come into force in January 2006, Latin American banana exporters would no longer be limited by quotas, but would be obliged to pay a duty of EUR230 per tonne (up from the current level of EUR75 per tonne).

Nine Latin American countries - Brazil, Costa Rica, Colombia, Ecuador, Guatemala, Honduras, Nicaragua, Panama and Venezuela - approached the WTO asking it to arbitrate on the matter, seeking to maintain current tariff levels.

Earlier this year, however, banana producers in the ACP (African, Caribbean and Pacific) countries countered with a request for tariff-free access for themselves and a EUR275 per tonne level for all other banana producing countries, arguing that when the quotas are removed next year, Latin America is likely to flood the market.

Delivering its findings on Monday, the WTO suggested that the EU's proposals "would not result in at least maintaining total market access" for the Latin American suppliers.

Responding to the Organisation's decision to uphold the Latin American group's complaint, EU Trade Commissioner, Peter Mandelson announced that:

"The tariff proposed by the EU was designed to be a neutral and fair conversion that would maintain current market access for all banana suppliers to the EC. We remain committed to follow the procedures established in the Cotonou Waiver agreed in Doha in 2001 as the best means to facilitate a solution to the longstanding 'banana saga'."

"We will start consultations with interested parties without delay. I hope that everyone will cooperate in finding a mutually acceptable solution within the strict deadline set by the WTO.”

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