Banana prices are set to fall after the longest trade dispute in EU history was settled in Geneva today.
A 15-year old wrangle with Latin America ended with the signing in Geneva of a deal gradually cutting high EU tariffs on Latin American bananas by nearly a third.
In return, Latin America will drop legal actions against the EU pending in the World Trade organisation – and Washington has agreed to settle a related banana dispute with Brussels.
Cutting import duties on Latin American bananas will make life tougher for competing exporters to the EU in the African, Caribbean and Pacific(ACP)countries, so today’s accord also includes up to €201m to help them adjust to expected losses.
Preferential EU for ACP banana producers led to legal challenges from Latin American countries at the World Trade Organisation.
Conservative MEP Robert Sturdy MEP, the Tory international trade spokesman in the European Parliament, welcomed the deal, saying: “European consumers will see the price of their bananas fall as a result of this decision.”
He went on: “Whatever the justification, it was wrong for the EU to give preferential treatment to one set of producers over another.
“Ending a bitter and long-running dispute with Latin America and the USA is significant because it shows that with a little bit of good will, we can move beyond protectionism.”
He said it was also right to give ACP producers a “soft landing”, adding: “They need legal certainty that their markets will not dry up and that the assistance being given by the EU reaches the producers, and not the large distributors and processors.
European Commission President Jose Manuel Barroso said: “I am delighted that we have finally found a way to solve the bananas dispute with a compromise that works for all sides. This dispute has soured global trade relations for too long.”
EU Trade Commissioner Benita Ferrero-Waldner said: “Today is a very good day for banana producers worldwide and for consumers, as we finally see the longest trade dispute in history solved.”
She added: “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 system in general.”
Under the deal, EU import tariffs on Latin American bananas will fall gradually from €175 to about €113 per tonne over six years.
In return, Latin American countries will not seek further cuts, and will drop outstanding legal cases against the EU, some of which date back to 1993.