Yes, We Have No Bananas!
Even the longest-running shows have to end, and so it is with the longest-running trade dispute ever – the infamous Banana War. Negotiators have been peeling away their differences and slipping towards a conclusion in fruitful talks in Brussels and Geneva. (Sorry, but I can’t resist a pun.)
No More War?
The Banana War is actually a quite serious case that was brought to the WTO by Latin American nations in 1993. The root cause was preferences established by the European Community to benefit former British and French colonies in Africa, the Caribbean and the Pacific (the ACP countries), which had the impact of excluding bananas from other producers. Led by Ecuador and others, the Latin case got a boost when they were joined by the United States, wanting to help Dole and Chiquita get their bananas to European markets. Word is out (see Times Online) that there is a draft agreement to end this spat, and that it is largely agreed between the EU and the Latins. The United States is expected to come on board the banana boat later this week or early next week.
The draft agreement would not end the EU’s discrimination for the former colonies overnight, according to a copy leaked early this week, but would phase down the tariffs paid for Latin American bananas over the course of seven years. The EU banana duty is currently €176/ton, which would eventually fall to €114/ton, substantially eroding (if not totally removing) the current preference for the ACP countries. The EU is sweetening the pot for the Latins, too, by offering to reduce tariffs on other fruits. The ACP countries would receive an extra €190 million in EU development aid.
