World trade talks could slip up over bananas at a key meeting in December if Latin America digs its heels in over a row with Europe.
Diplomats say the row over billions of dollars of bananas traded on world markets - and a key revenue-earner for many Latin American countries - has simmered all year despite the EU's pledge to scrap its complex system of quotas and duties replacing it with for a tariff-only system from January 2006
The Latin Americans, led by the world's top banana exporter Ecuador, are pressurising the EU over its proposed tariff rate €230 per tonne. Latin American suppliers currently pay €75 per tonne within a set quota.
The unspoken threat is for bananas to be used as political leverage, even a blocking tactic, at a key WTO meeting on the Doha Round of trade talks slated for Hong Kong in December if the matter is not resolved.
"It's a very good negotiating chip," one EU diplomat said. "It's a nuclear option ... but there have been rumblings that bananas could be an issue for Hong Kong."
"A lot will depend on where the rest of the negotiations have got to. If they [Latin Americans] felt that bananas were going badly, they may want to be difficult there," she said.
Pitted against the Latin Americans are a group of Europe's former African, Caribbean and Pacific (ACP) colonies, whose bananas enter EU markets free of duty.
They also fiercely disagree with a €230 tariff, but for other reasons. They want at least €275 to prevent cheaper Latin American bananas from flooding Europe. The ACP group includes top African producers Ivory Coast and Cameroon, and Caribbean suppliers such as the Windward Islands.
But the Latin Americans are in a strong legal position. If there is any delay to the January 2006 introduction of the new regime, or if the EU imposed a tariff that the WTO arbitration panel had criticised, ACP duty-free quotas could become illegal - and open to challenge.
This would be an embarrassment the EU would certainly seek to avoid.
"Everything depends on the [European] Commission," said Dacio Castillo, Honduras' ambassador to the WTO in Geneva.
"They're going to be putting developing countries against developing countries...the ACPs have the preference but we are the ones who have the rights in our hands."