The European Union asked the World Trade Organisation (WTO) yesterday to rule whether its latest proposal on banana import tariff is acceptable.
The EU is struggling to find a new banana import tariff for its top suppliers, mainly from Latin America. It lost the bitter 1990s "banana wars" to Latin America, and has pledged to replace its tariff and quota import system from January 2006 with a single tariff regime. The problem throughout this year has been to agree a tariff level.
Its latest proposal, floated earlier this month, was for a duty of €187 a tonne, a figure that the EU had to lower after an earlier WTO arbitration panel ruled that its previous €230 idea discriminated against Latin America.
"Despite our efforts, we were not able to come to an agreement with our partners. Nor did they present an alternative proposal," EU agriculture commissioner Mariann Fischer-Boel said in a statement.
"Time is running out for the introduction of the tariff-only regime by next year," she said. "I still hope we can find a solution to this dispute which will be acceptable to everyone."
The same WTO arbitrator will now be asked to determine, within 30 days of the EU's request, whether the bloc has "rectified the matter".
A second WTO ruling will be binding on both parties - the EU and also the group of nine Latin countries that requested the first arbitration panel.
Latin America's banana suppliers - led by the world's top exporter, Ecuador - pay €75, within set quotas, to get their fruit into Europe. Anything above quota is hit with a hefty duty of €680 a tonne.
Pitted against the Latin Americans are a group of former European colonies in the African, Caribbean and Pacific (ACP) group, which enjoy an exclusive EU duty-free quota.
While Latin America wants a duty of no more than €75, the less competitive ACP states want €275 for their rivals to stop cheaper Latin fruit from flooding lucrative EU markets. - (Reuters)
