Last-ditch talks at the World Trade Organisation (WTO) on Friday late failed to produce a deal in the long-running dispute between Latin American countries and the European Union over EU banana imports. The EU's representative to the WTO said Latin American countries had rejected a compromise brokered by WTO Director-General Pascal Lamy.
The continuing impasse in one of the most intractable and long-running trade disputes threatens to derail next week's make-or-break Doha round talks on a global trade pact. But a senior diplomat from Ecuador, the world's biggest banana exporter, said the Latin American producers were still willing to negotiate, and a deal was possible before next week's trade talks.
"The Latinos are not accepting the good offices or the solution proposed by Pascal Lamy," EU ambassador Eckart Guth told reporters. "This process is over but the proposal of Pascal Lamy is still on the table. We accept it." Lamy had offered to find a compromise in the long-running dispute, which has seen Latin American growers and the United States bring successful challenges at the WTO to the EU's banana import regime.
The EU gives duty-free access to bananas from former European colonies in Africa, the Caribbean and Pacific (ACP). Under a previous reform it cut the tariff on bananas from other suppliers to 176 euros ($280) a tonne, but the Latin American producers say that is still much too high.
Lamy's compromise would see the tariff fall to 116 euros by 2015, with an initial cut of 26 euros, in exchange for a "peace clause" in which Latin American countries would drop WTO lawsuits against the EU and mount no further challenges.
Colombia has accepted the deal, but other Latin American growers say the numbers are not generous enough. "For the time being we don't agree on that but we think that we could keep on negotiating and we could find a balanced approach over this issue," said Cesar Montano Huerta, the second most senior diplomat in Ecuador's WTO mission.
"I don't see that we cannot come into an agreement in the following days," he told reporters. Montano Huerta disagreed with Guth's characterisation of Lamy's offer as "take it or leave it", saying the Europeans had "kicked the table" and did not want to negotiate any more. But Guth said it was impossible for the EU to budge further. Even Lamy's compromise had been unpalatable, and hard to get past the EU Commission and member states.
If the issue is not defused now, it will end up on the agenda of ministers at next week's trade talks. "It will be a little bit more complicated," he said. That is because the current proposals on agriculture have still not overcome a conflict between the needs of Latin American countries, who want faster and deeper cuts in tariffs for their products, and ACP countries, who want to retain preferential access to the EU and US markets, and therefore see tariffs on their goods come down more slowly.
The Latin American countries and the ACP states are negotiating a solution, and Montano Huerta said their lists now overlap by only 12 items, including rum and melons. But any such compromise would be impossible if the lucrative but contentious banana remains an issue, making an overall Doha deal unlikely in the WTO's consensus-driven system.
Montano Huerta said the gap between the EU and Ecuador's position was not wide, with Ecuador proposing a final tariff of 109 euros, reached over 5 years with a downpayment of 35 euros. Other Latin American growers such as Panama and Honduras favour even lower EU tariffs.
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