EU Agriculture Commissioner Fischer Boel said agreement had been reached between the two main parties — Latin American producers and less efficient growers in the former European colonies of the African Caribbean and Pacific (ACP) countries which have preferential access to EU markets.
The deal will cut the tariff paid on bananas from Latin America and shield the European Union from further legal action at the WTO, which has condemned its import regime.
“We have the two big players on board,” she said, telling journalists that a draft agreement could be reached this week.
Ministers from Caribbean countries, who say their economies will be devastated by an agreement they recognise as inevitable, said they had not seen details of the deal and raised concerns about its possible economic effects.
Banana exports are the mainstay of many Caribbean economies and adjusting to the loss of markets is already hurting producers and communities on the tiny islands.
“It’s like not exporting watches from Geneva — it’s that significant,” said Trinidad Trade Minister Mariano Browne.
A diplomat from a key Latin American producer said an EU demand, raised at talks on Tuesday night, that the EU should be exempt from further legal challenges over the fruit as soon as the deal is signed rather than when the tariff changes have been registered at the WTO, could torpedo the agreement.
“This changes all the balance and puts into jeopardy what we’ve done,” said the diplomat, who asked not to be identified.
Because formal registration, known as certification, could take months or years if other WTO members challenge the new tariffs, the EU “peace clause” proposal suggested Brussels did not intend to stick to the deal, the diplomat said.
Latin American exporters would not launch any new disputes during the certification process if Brussels was implementing the deal as agreed, the diplomat said.
Agreement now required a “yes” from the United States, Fischer Boel said, adding she was confident this would happen as US Trade Representative Ron Kirk had promised he would facilitate a deal.
“I’m sure that we would be able to have the text ready before the end of this week,” she said. Although the United States does not export bananas, it is a party to the deal because several big distributors and processors such as Chiquita, Dole and Del Monte are US corporations. Another big distributor is the Irish company Fyffes.
Full details of the package were not immediately available, but the essential element was that the tariff on bananas would fall to $114 a tonne in 2016 — or possibly later — from $176, with an initial cut to $148.
The deal — removing an obstacle to an eventual agreement in the WTO’s long-running Doha Round — is linked to a broader pact in trade in tropical products, such as rum, tobacco, sugar, arrowroot and cut flowers.
Concessions by Latin American banana exporters such as Colombia and Ecuador, plus an aid package from Brussels, will have persuaded the ACP countries to sign up to a deal that erodes their competitive edge in the lucrative European market.
Cameroon’s Commerce Minister Luc Magloire Atangana Mbarga said Cameroon did not agree with the financial packages that had been proposed. “As far as I know no agreement has actually been reached,” he told a news conference.
Caribbean ministers said it remained to be seen how the aid would be divided up among ACP members with diverging interests.
