EU fires opening salvo over banana duties

The European Union, preparing to revamp its banana import regime from 2006, on Wednesday signalled the start of what may be long and bitter negotiations by declaring a preferred entry tariff.
Speaking after meeting senior officials from the African, Caribbean and Pacific (ACP) country group, EU Trade Commissioner Pascal Lamy said the EU's position during talks with its chief banana suppliers was for a duty of 230 euros/tonne ($294.20).
"I announced for the first time the figure that the EU will put on the table," he told a news conference after the meeting.
"This is the level of tariff protection for the EU of 25 states. The figure is 230 euros per tonne," he said. "The figure I put forward was a contribution to the negotiations."
The EU had been expected to propose a new banana duty before the end of 2004 to allow for a full year of bargaining before a single-tariff regime comes into force from January 2006.
The EU's current system includes three quotas totalling around 3.4 million tonnes. ACP countries have a duty-free quota for 750,000 tonnes, while Latin American suppliers of so-called dollar bananas face a tariff of 75 euros on the remaining quotas.
Keen to avoid a re-run of the bitter 1990s dispute over bananas, which it lost at the World Trade Organisation (WTO), the EU started informal talks with the world's major banana suppliers last month on a single-tariff regime.
Worth billions of dollars on world markets and key for many Latin American states, bananas are a sensitive subject for the EU, which must first square any new import regime with the WTO.
Two major country groups with opposing views will be involved in the EU banana talks. Latin America, led by the world's largest banana exporter Ecuador, insists on no increases above the EU's current base tariff of 75 euros.
Pitted against the Latin Americans are some of Europe's former colonies in the ACP group, who want a duty of 275 euros.
The ACP stance is backed by Europe's only banana producers, France and Spain, and also by African producers - whose fruit is much less competitive than dollar bananas. Africa's main banana suppliers are Ivory Coast and Cameroon.
"It seems clear to me...that it (230 euros/tonne) will be considered by some of our ACP friends as too low and by some of our Latin American friends as too high. I expect that - that's how negotiations always go," Lamy said.
ACP and Latin American producers say anything but their preferred tariffs would have a disastrous impact, destroying the livelihoods of thousands of people.