18 July 2008

A plan by the EU to cut the price of bananas threatens to derail next week's last-ditch talks to save the stalled world trade liberalisation negotiations.  African, Caribbean and Pacific (ACP) countries have said they will walk out of the ministerial talks on the so-called Doha round in Geneva if their preferential treatment for banana exports to the EU is scrapped or watered down too far.  The dispute arose after the European commission said last night that it had accepted, in principle, compromise proposals on banana exports tabled by Pascal Lamy, WTO director general, last week.

Lamy's plan could eventually cut the price of bananas for European consumers by reducing the tariff on non-ACP bananas. The EU's deal with ACP banana exporters gives duty-free access for up to 775,000 tonnes a year. Caribbean governments say this helps lift thousands of small farmers out of poverty but it has been struck down 11 times by WTO panels acting on complaints from the US and Latin American countries in the dollar zone.

The US exports no bananas to Europe but three US firms - Chiquita, Del Monte and Dole - are among the biggest distributors. Lamy's proposals would include a "peace clause" to stop all WTO dispute procedures. Peter Mandelson, EU trade commissioner, said last night: "Resolving this long-running problem must be part of a final Doha deal."

Source: The Guardian