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EU: Bananas deal still risks slip ups

A deal on banana tariffs is close at hand between Latin America and the European Union but risks being scuppered by the United States and poor banana-producing countries, officials said Tuesday.

"The African, Caribbean and Pacific (ACP) countries affected by this issue have the impression that we have not been heard," Luc Mbarga Atangana, Cameroon Trade Minister, complained.

The banana dispute is the longest-running in the World Trade Organization, brought about by the EU's banana import regime introduced in July 1993.

While bananas shipped from Latin American countries are subject to import taxes, those from mostly poor former European colonies in the ACP region enter the bloc tariff-free.

The United States does not export bananas to the EU but three of the largest producers with plantations in Latin America are US-based multinationals -- Chiquita, Del Monte and Dole.

Diplomats have said in recent weeks that Latin American countries and the EU are close to a deal.

But to end the overall dispute, an accord also has to be struck between the EU and the ACP region on compensation to help poor banana producers cope with the tariff changes.

Some ACP nations are still unhappy with the proposed agreement.

"We don't like the deal, but we have very little leverage to improve it ... we can live with it. That's the overall stand of the ACP," said a trade official familiar with the group.

"But there are some wild cards within the grouping -- Cameroon and Cote Ivoire," he added, noting that the two countries are particularly worried about their competitiveness being eroded by lower tariffs imposed on Latin American bananas and could therefore oppose the ACP stance.

There is another wild card -- the United States, added the trade source.

"There is a feeling that the US wants to scupper the deal because it would leave them dangerously exposed on the cotton issue," said the trade official.

"We know that cotton is one of the biggest injustices in trade."

Subsidies paid by the United States and other rich countries to their cotton producers have been blamed for skewing trade against poor competitors.

Meanwhile, Costa Rica Commerce Minister Marco Ruiz was more positive that the banana deal could be concluded in coming days.

"We're very, very close to a deal with the EU. We have a general consensus last week that it would be possible for the technical team to finish the details in the coming week," he told AFP.

"In terms of the compensation, that's between the EU and the ACP. The agreement negotiated has left some margin" for a deal to be reached, he added.

He said there have been "private conversations" with the former European colonies in the ACP bloc that have "recognised the importance of ending" the dispute.

Under the proposed deal between Brussels and Latin America, taxes imposed by the European Union on bananas from Latin America will fall progressively from 176 euros per tonne to 114 euros per tonne between 2010 and 2017, sources said.

According to an internal European Commission memo obtained by AFP, ACP countries would be paid up to 190 million euros (284 million dollars) over four years to help them cope with the tariff changes.

The dispute was first brought to the WTO in 1996 by Ecuador, Guatemala, Honduras, Mexico and the United States.


Publication date: 12/2/2009


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