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February 07, 2011

EU lawmakers OK banana duty cuts for Latin America

by Juliane von Reppert-Bismarck and Charlie Dunmore

European Union lawmakers have approved a deal to cut EU import tariffs on bananas from Latin America, ending the world's longest-running trade row, a European Parliament official said.

A majority in the European Parliament voted to cut duties on Latin American bananas by 35 percent over six years, potentially improving the competitive edge of producers such as Chiquita and Dole over smaller growers in Africa, the Caribbean, Pacific and the European Union.

"This agreement is already being implemented provisionally and now needs final approval from the members of the World Trade Organization," the parliamentary spokeswoman said.

Once rubber-stamped by the WTO later this year, the deal will mark a victory by the world's largest banana producers in a near 20-year battle for cheap access to the EU, the world's largest consumer of the fruit.

It is expected to persuade the United States and 11 Latin American countries, led by Ecuador, to drop a legal challenge accusing Europe of imposing illegally high tariffs to protect banana producers in its Caribbean territories and the Canary Islands, as well as in former colonies of member states.

The deal will cut duties on imports from Latin America to 114 euros ($158) per tonne in 2017, from 176 euros at present.

The EU banana import regime, dating from 1993, had given duty-free access to mostly small producers in former colonies and imposed tariffs on Latin American bananas, most of which are produced by the large U.S. multinationals.

Latin American countries planning free trade agreements with the EU -- such as Peru and Colombia -- have already secured duty cuts to about 75 euros, so Thursday's deal will largely benefit Ecuador, which in 2009 refused a trade pact with Europe.

African, Caribbean and Pacific producers, who oppose the cuts, will retain their duty-free access to EU markets.

Separately, the EU will now decide on an aid package worth up to 200 million euros to support fledgling banana production in Ivory Coast, Cameroon, the Dominican Republic and Suriname. Lawmakers will also debate aid for European producers.

"The future for small banana producers and sustainable production is now even more uncertain," said Catherine Greze, a Green Party EU lawmaker who voted against the motion. She said funds for encouraging banana production could reduce the EU's available budget for other development projects.

The EU imported about 4.8 million tonnes of bananas in 2008 worth a total of some 2.9 billion euros, according to European Commission data.


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