In the deal, seen as a boost for the Doha Round of world trade talks, the EU will gradually cut its import tariff on bananas from Latin America from 176 euros per ton to 114 euros. In response, the United States has agreed to settle its related dispute with the EU. The EU has also offered to mobilize up to 200 million euros for the main African and Caribbean banana-exporting countries to help them adjust to stiffer competition from Latin America.
“Today is a very good day for banana producers worldwide and for consumers, as we finally see the ‘longest trade dispute in history’ solved,' European Trade Commissioner Benita Ferrero-Waldner said. 'After years of tedious negotiations the deal reached will provide an important push for progress in the Doha Round talks and for the multilateral trading systems in general.”
As part of the deal, the EU will cut its import tariff on bananas in stages, from the current rate of 176 euros per ton to 114 euros per ton in 2017, at the earliest. The EU will also make the biggest cut first, with a reduction of 28 euros per ton to 148 euros per ton, once all parties sign the deal.
In return, Latin American countries will forfeit demand for further cuts and drop cases against the EU. Latin American producers will settle several legal disputes pending against the EU at the World Trade Organization, some dating as far back as 1993.
Bananas from African, Caribbean and Pacific countries (ACP) will continue to enjoy duty- and quota-free access to the EU under separate trade and development agreements. The deal agreed with Latin American countries give ACP countries guarantees it won't cut its bananas tariff any further in the framework of the Doha Round and several years to adjust to stiffer competition from Latin America.
“This dispute on bananas has soured global trade relations for too long,' EU Agriculture and Rural Development Commissioner Mariann Fischer Boel said. 'So it’s great news that we’ve finally reached an agreement. I see it as a really positive signal for the Round as a whole.”
