EU, Latin America, U.S. Reach Agreement in Long-Running Banana Dispute
On December 15, 2009, the European Union and Latin American countries reached an agreement to end their 15-year dispute over EU banana imports. In response, the U.S. has agreed to settle its related dispute with the EU.
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(Note that the U.S. does not produce bananas for export to the EU, but three of the largest banana producers with plantations in Latin America are U.S.-based multinationals - Chiquita, Del Monte, and Dole.)
WTO's Director General Welcomes Deal, Which May Boost Doha Talks
World Trade Organization Director General Pascal Lamy welcomed the news, stating that the bananas dispute has been one of the most technically complex, politically sensitive and commercially meaningful legal disputes ever brought to the WTO and one of the longest running "sagas" in the history of the post-WWII multilateral trading system.
The deal is also seen as a boost for the Doha Round of world trade talks and the ability of the multilateral trading system to solve such a contentious dispute.
EU Will Cut Its Tariff on Bananas, L. America & U.S. Will Drop Disputes
As part of the deal, the EU will:
cut its import tariff on bananas in stages, from the current rate of 176/ton to 114/ton in 2017, at the earliest;
make the biggest cut first - the EU will first cut its tariff by 28/ton to 148/per ton, once all parties sign the deal; and
continue to give bananas from African, Caribbean and Pacific countries (ACP) duty- and quota-free access to the EU under separate agreements, giving them several years to adjust to stiffer competition from Latin America.
In return, Latin American countries will:
not demand further tariff cuts once the Doha Round of talks on global trade resumes; and
drop cases against the EU - Latin American producers will settle several legal disputes pending against the EU at the WTO, some dating back as far as 1993.
The U.S., in turn will:
In parallel, the EU and the U.S. have initialed a deal in which the U.S. agrees to settle its WTO dispute on bananas with the EU.
EU Council/Parliament Must Approve Agreement for Deals to be Signed
Once the EU Council approves the bananas agreement, the EU will sign the deal with Latin American countries. It will also sign a settlement agreement with the U.S. Then, to comply with the recently-ratified Lisbon Treaty, the European Parliament must give its consent before the Council can conclude the deals.
(See ITT's Online Archives or 12/02/08 news, 08120205, for BP summary of the WTO Appellate Body ruling against the EU in the compliance proceeding brought by the U.S. and the parallel proceeding brought by Ecuador, with links to other summaries.)
EU press release (dated 12/15/09) available at http://trade.ec.europa.eu/doclib/press/index.cfm?id=500
WTO press release (dated 12/15/09) available at http://www.wto.org/english/news_e/pres09_e/pr591_e.htm