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IP/09/1938

Brussels, 15 December 2009

Ending the longest trade dispute in history: EU initials deal on bananas with Latin American countries

Meeting at the WTO in Geneva, ambassadors from the EU and Latin American countries today agreed to end a 15-year dispute over EU banana imports. In the deal, seen as a boost for the Doha Round of world trade talks, the EU will gradually cut its import tariff on bananas from Latin America from €176 per tonne to €114. In response, the US has agreed to settle its related dispute with the EU. The EU has also offered to mobilise up to €200 million for the main African and Caribbean banana-exporting countries to help them adjust to stiffer competition from Latin America.

Commenting on the agreement, European Commission President José Manuel Barroso said: "I am delighted that we have finally found a way to solve the bananas dispute with a compromise that works for all sides.  This is an important boost for the multilateral system".

Commenting on the agreement, European Trade Commissioner Benita Ferrero-Waldner said: "Today is a very good day for banana producers worldwide and for consumers, as we finally see the 'longest trade dispute in history' solved. After years of tedious negotiations the deal reached will provide an important push for progress in the Doha Round talks and for the multilateral trading systems in general. At this occasion let me pay tribute to my predecessor as Trade Commissioner, Baroness Cathy Ashton, and senior Commission officials, who have been instrumental in achieving this deal."

Development and Humanitarian Aid Commissioner Karel De Gucht said: "This is the best possible deal we could achieve. It reconciles all parties' legitimate interests. I know ACP producers will face challenges in adjusting to the new situation. But the EU will do its best to help. With a more stable environment, all stakeholders will be able to focus more on the improvement of production conditions in banana supply chains."

Agriculture and Rural Development Commissioner Mariann Fischer Boel said: "This dispute on bananas has soured global trade relations for too long. So it's great news that we've finally reached an agreement. It's well balanced, and it allows us to move ahead on so-called 'tropical' and 'preference erosion' products and thus on the Doha Round. I see it as a really positive signal for the Round as a whole."

Meeting at the WTO in Geneva, ambassadors from the EU and Latin American countries today agreed to end a dispute over the EU's banana imports which has lasted for more than 15 years.

As part of the deal, the EU will:

  • cut its import tariff on bananas - the EU will do so in stages, from the current rate of €176/tonne to €114/tonne in 2017, at the earliest; and

  • make the biggest cut first - the EU will first cut its tariff by €28/tonne to €148/per

tonne, once all parties sign the deal.

In return, Latin American countries will:

  • not demand further cuts - the EU will not cut its tariff further 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 date back as far as 1993.

Continued EU support for African and Caribbean producers

Bananas from African, Caribbean and Pacific countries (ACP) will continue to enjoy duty- and quota-free access to the EU under separate trade and development agreements. Today's deal offers these countries two important outcomes:

  • Predictability - the EU guarantees it won’t cut its bananas tariff any further in the framework of the Doha Round.

  • Time to adapt - ACP countries will have several years to adjust to stiffer competition from Latin America.

Furthermore, the Commission will propose mobilising up to €200 million from the EU budget to support the main ACP exporting countries' adaptation - in addition to existing aid.

'Tropical' and 'Preference Erosion' products

In parallel, the EU, ACP and Latin American countries have agreed on an approach on the so-called 'tropical' and 'preference erosion' products, which they will jointly promote in the context of the on-going DDA negotiations. 'Tropical products' will be subject to deeper tariff cuts, while tariff cuts for 'preference erosion' products of interest to ACP countries will be conducted over a relatively longer period.

Dispute with the US also settled

In parallel, the EU and the US have initialled a deal in which the US agrees to settle its WTO dispute on bananas with the EU.

A new process for approving the agreement

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 US. Then, to comply with the recently-ratified Lisbon Treaty, the European Parliament must give its consent before the Council can conclude the deals.


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