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Kent Gilbert/AP
Bananas Hold Up WTO Trade Talks
July 29, 2008 08:00 AM
by
Rachel Balik
Disagreement over the fairness of reduced EU banana tariffs for Latin American countries may delay agreement in Doha talks.
30-Second Summary
The World Trade Organization’s long-awaited Doha global trade pact is being stymied by a number of issues. One of the most pressing may be the African, Caribbean and Pacific Group of States' (ACP) position on banana tariffs. Currently, countries in the ACP enjoy a tax-free banana trade with the EU, a business that accounts for a large portion of those countries’ economies.
In the current trade talks, 11 Latin American countries are negotiating for lower banana tariffs in the EU, an agreement that would grant them a larger share of the banana market currently dominated by the ACP. An initial proposal recommended that tariffs be reduced to 116 euros per ton by 2016, but Panama stated that the Latin American countries “are willing to be reasonable in the interest of settling this long dispute, but will need to see a better starting reduction, phase-in period and final rate than the one the EC [European Commission] is willing to accept.”
Conversely, the ACP is refusing to accept the lowered tariff, and has offered a counterproposal changing the target year for lowered tariffs from 2016 to 2020. The ACP has stated that a lower tax on Latin American bananas “would severely damage the interests of Caribbean producers.” They will not agree to the current global trade pact unless their demands are met.
The global trade pact may also run into trouble in other areas, because while the United States feels it is making tremendous compromises, China and India feel the deal is unfair, and has allowed the richer nations to protect industries most important to them.
In the current trade talks, 11 Latin American countries are negotiating for lower banana tariffs in the EU, an agreement that would grant them a larger share of the banana market currently dominated by the ACP. An initial proposal recommended that tariffs be reduced to 116 euros per ton by 2016, but Panama stated that the Latin American countries “are willing to be reasonable in the interest of settling this long dispute, but will need to see a better starting reduction, phase-in period and final rate than the one the EC [European Commission] is willing to accept.”
Conversely, the ACP is refusing to accept the lowered tariff, and has offered a counterproposal changing the target year for lowered tariffs from 2016 to 2020. The ACP has stated that a lower tax on Latin American bananas “would severely damage the interests of Caribbean producers.” They will not agree to the current global trade pact unless their demands are met.
The global trade pact may also run into trouble in other areas, because while the United States feels it is making tremendous compromises, China and India feel the deal is unfair, and has allowed the richer nations to protect industries most important to them.
Headline Links: Banana tariff dispute possibly to hold up Doha talks
The WTO cannot solidify the global trade pact because of resistance from the African, Caribbean and Pacific (ACP) trade grouping over banana tariffs. “We will block the [WTO] negotiations if our latest counterproposal is not accepted,” said Luc Magloire Mbarga Atangana, Cameroon’s trade minister and a spokesman for the ACP. The EU has made a pact with 11 Latin American countries to lower banana tariffs by 2016, and the ACP is worried these lowered tariffs will hinder its own banana trade. The ACP is waiting to hear what the reaction to its counterproposal will be.
Source: Outlook India
The ACP counterproposal asks that Latin American banana tariffs be lowered by 2020, and not by 2016 as the original agreement suggests. However, the ambassador of Honduras, who is representing the Latin American countries, says that he is holding out for an even lower tariff. At the present time, ACP bananas ship to the EU without tariffs.
Source: EU Business
Background: WTO trade negotiations
The WTO is entering a second week of negotiations as wealthy and developing nations fail to reach an agreement that seems fair to both sides. Banana tariffs are not the only issue on the table. The U.S. feels that it has made radical compromises, but that China and India are foiling the closing of the deal. Meanwhile, China has said wealthy nations are only flexible in some sectors but have structured the deal to preserve more lucrative industries. China’s press counselor told Reuters that “Priority sectors highlighted by them include machinery, chemicals and automobiles, in which they enjoy substantial export advantage.”
Source: The BBC
In a press statement issued before negotiations began, the ACP said that the lowering of banana taxes for Latin American countries would “would severely damage the interests of Caribbean producers.” The ACP States say the group of Latin American countries “has as its main objective the elimination of the small share of the EU market available to banana producers in ACP states.”
Source: ACP States
Panama, one of the Latin American countries seeking lower tariffs, said in a statement in mid-July that it would accept the proposed tariff reduction as a starting point, but ultimately wanted a tariff lower than the promised 116 euros. The statement said that the Latin American countries are “are willing to be reasonable in the interest of settling this long dispute, but will need to see a better starting reduction, phase-in period and final rate than the one the EC (European Commission) is willing to accept.”
Source: Panama Forum (Reuters)
Related Topic: Banana industry in danger?
Rising prices and the spread of a fungus may make bananas a rare commodity for Americans in future. Dan Koeppel, author of “Banana: The Fate of the Fruit That Changed the World,” predicts that rising banana prices combined with the spread of a fungus that is damaging crops will leave Americans searching for some other fruit to put in their cereal. He warns, “The banana is a living organism. It can get sick, and since bananas all come from the same gene pool, a virulent enough malady could wipe out the world’s commercial banana crop in a matter of years.”
Source: findingDulcinea
Reference: The WTO and the Doha Development Agenda
According to the WTO, “the November 2001 declaration of the Fourth Ministerial Conference in Doha, Qatar, provides the mandate for negotiations on a range of subjects and other work. The negotiations include those on agriculture and services, which began in early 2000.” The negotiations have been dragged out over several years, but daily updates are available on the Doha Development page of the WTO.
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