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  3. 20-Year Banana Tariff Dispute Finally Concluded

20-Year Banana Tariff Dispute Finally Concluded

by Ulrika Lomas,, Brussels

16 November 2012

The European Union (EU) and 10 Latin American nations have signed an agreement settling the longest-running series of trade disputes in the history of the multilateral trading system, even predating the World Trade Organization (WTO).

The deal involves commitments from the EU to replace its complex and outlawed banana import regime with tariffs only. Under the agreement, banana import tariffs are to decline annually to EUR114 per tonne. In return, the Latin American countries have pledged to settle several legal disputes pending against the EU at the WTO, some dating as far back as 1993. Bananas from African, Caribbean and Pacific (ACP) countries will continue to enjoy duty- and quota-free access to the EU under separate trade and development agreements.

“This is a truly historic moment,” said WTO Director-General Pascal Lamy. “After so many twists and turns, these complicated and politically contentious disputes can finally be put to bed. It has taken so long that quite a few people who worked on the cases, both in the Secretariat and in member governments have retired long ago.”

The Latin American nations party to the agreement are: Brazil, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Panama and Venezuela. Peru did not sign the mutually agreed solution, known as 'The Geneva Banana Agreement', because it was not directly involved in the disputes, although it participated in some key negotiations.

The Geneva Banana Agreement was reached by the EU, the Latin American countries and the United States in December 2009. Since then a number of legal steps were required, including for each country to ratify the 2009 agreement and for the EU to introduce legislation and regulations to implement it. Having been accepted by the WTO’s membership as part of the EU’s new commitment, it is now multilateral.

From a rate as high as EUR148/tonne from December 2009 to December 2010, the agreed maximum tariff rates are to be bound at:

  • EUR136/tonne from January 1, 2012;
  • EUR132/tonne from January 1, 2013;
  • EUR127/tonne from January 1, 2014;
  • EUR122/tonne from January 1, 2015;
  • EUR117/tonne from January 1, 2016; and,
  • EUR114/tonne from January 1, 2017, onward.

It was agreed that if there is no agreement on a framework deal in the Doha Round agriculture negotiations by December 31, 2013, these annual tariff cuts for the remaining years can be delayed by up to two years.

The disputes date back to 1992 under the General Agreement on Tariffs and Trade, and continued under the auspices of the WTO when it was renamed from the GATT.

TAGS: Pakistan | tax | Nicaragua | Venezuela | tariffs | World Trade Organisation (WTO) | Colombia | Ecuador | Mexico | excise duty | legislation | trade disputes | Brazil | Guatemala | Peru | import duty | regulation | trade | European Union (EU) | Honduras | Panama | Europe

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