Substance of trade deal on bananas reached

The European Union and two blocs of developing countries have reached a deal on bananas, ending the world’s oldest trade dispute and removing a barrier to a new agreement to open up global commerce, diplomats said on Tuesday. But some minor details still remain to be ironed out, and the deal will not be ready for signing until later this week or next week, they said. “Fine tuning,” said one European diplomat, expressing confidence the deal could be completed in the next day or so, during or after the current World Trade Organisation conference.”Very close,” said a Latin American diplomat, also forecasting a deal this week.
“We have the substance of a deal,” said a diplomat from one of the African, Caribbean and Pacific (ACP) countries — the group of mainly former European colonies who will be the main losers from a change in the banana regime.The ACP diplomat said the United States still had some concerns about the legal language of the agreement, but these should be resolved next week.The deal will end the decades-old dispute by gradually cutting the tariff paid in the lucrative European market on bananas from Latin America.
Latin American producers such as Ecuador, Colombia and Costa Rica argue that the EU’s current regime discriminates against them — in breach of WTO rules — by charging lower tariffs on fruit from less efficient ACP countries as part of the EU’s preferential treatment of imports from certain poor countries. WTO courts have ruled against the current EU regime, and Brussels must change it.
Under the deal, ACP countries such as Trinidad and Cameroon will be compensated with a development package from the EU. The bananas deal is also linked to a broader agreement under the WTO’s eight-year-old Doha round regulating trade in tropical products such as sugar, rum, tobacco and other fruit, and the ACP countries have secured concessions there, diplomats said. Full details of the package were not immediately available, but the essential element is that the tariff on bananas will fall to $114 a tonne in 2016 — or possibly later — from $176, with an initial cut to $148.
Although the United States does not export bananas, it is a party to the deal because several big distributors and processors such as Chiquita (CQB.N), Dole (DOLE.N) and Del Monte (DLM.N) are U.S. corporations. Another big distributor is the Irish company Fyffes (FFY.I).The deal will also guarantee that the European Union will not be subject to any more legal challenges over the dispute, build the terms into any future Doha deal and specify what happens if an overall Doha deal fails to be reached.A study by the International Centre for Trade and Sustainable Development concluded that targeted aid for producers in the ACP countries could benefit them more than improved access to export markets.
For the original report go to http://www.reuters.com/article/companyNews/idUSGEE5B02KT20091201

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s