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MEPs Approve Deal On Latin American Banana Imports

by Ulrika Lomas, Tax-News.com, Brussels

08 February 2011


The 2009 Geneva agreement on European Union (EU) import tariffs for bananas from Latin American countries, which is designed to end the longest-running dispute in the history of international trade, has received the backing of the European Parliament (EP).

The EU is the world's largest banana market. More than 70% of bananas sold in the EU come from Latin America (mainly Ecuador, Colombia, Costa Rica and Panama), around 20% come from the African, Caribbean and Pacific (ACP) group of states (chiefly Cameroon, Côte d'Ivoire, Dominican Republic, Belize and Surinam) while the rest are grown in the EU itself (Cyprus, Greece, Madeira, Canary Islands and French overseas departments of Guadeloupe and Martinique).

Under the Geneva agreement, the EU has agreed to gradually end its preferential treatment of banana exporters in ACP countries in exchange for an agreement by Latin American countries to drop their complaints at the World Trade Organisation.

As for the main ACP banana-producing countries, in addition to regular EU aid, they are to receive extra help from the EU budget of up to EUR200m (USD272m) to compensate for the EU’s improving trade relations with Latin America. The EU's gradual reduction in its import tariff on bananas from Latin America, from EUR176 per tonne at the outset to EUR114 in 2017 is expected to make Latin American bananas more competitive on the EU market.

MEPs have warned, however, that the deal that has been reached cannot reconcile the interests of all parties, including those of EU banana producers. They do not believe those special financial provisions give sufficient support to EU producers in the ACP countries, who could be significantly affected by the agreement.

They therefore called on the European Commission (EC) to increase support for EU and ACP banana growers and extend it to 2020, if necessary. They urged the relevant EU authorities to take other steps to ensure that domestic EU producers are able to stay in the market.

MEPs have also firmly rejected any attempt to finance this support by using money earmarked for development cooperation. They have therefore asked the EC to indicate clearly that it would be financed by fresh money from additional resources, and to present a new multiannual financing arrangement.

TAGS: tax | European Commission | law | tariffs | trade treaty | Belize | Colombia | Ecuador | Guadeloupe | Madeira | agreements | trade disputes | Cameroon | Costa Rica | Cyprus | Dominica | Dominican Republic | Greece | Martinique | import duty | trade | European Union (EU) | Panama | Europe

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