EU floats new banana tariff

The European Commission has lowered its proposed banana import duty to 199 euros ($242.80) a tonne from 2006 after a world trade panel labelled its earlier figure as discriminatory, a senior EU source said on Thursday.
The Commission, which negotiates foreign trade on behalf of the EU's 25 governments, was also considering keeping a duty-free import quota for the EU's banana suppliers in the African, Caribbean and Pacific (ACP) group, he said.
This volume was still being finalised, he said. At present, ACP countries have an exclusive EU quota of 750,000 tonnes a year, free of import duties. Industry sources said they believed the new ACP quota might not change much from the current volume.
Last year, the EU announced that it wanted 230 euros/tonne as its entry duty for bananas in a single-tariff regime that it has pledged to bring into force from January 2006 - a deal agreed some years ago that ended the bitter 1990s "banana wars".
The EU undertook to dismantle a complex series of duties and quotas seen as discriminating against the Latin Americans, and US-based fruit companies such as Chiquita Brands International, and replace them in a new streamlined system.
Now, it appears that the new regime might not be quota-free.
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 World Trade Organisation (WTO).
In March, a group of Latin American suppliers, led by the world's top banana exporter Ecuador, asked the WTO to arbitrate on whether the first proposal of 230 euros/tonne would maintain their existing access to EU markets.
These countries want a duty of no more than 75 euros.
Last month, a WTO panel said 230 euros/tonne would discriminate against Latin America, so the EU has been forced to propose a new figure. If the Latin Americans remain unhappy with this level, they can request a second round of WTO arbitration.
The latest proposal of 199 euros/tonne is a working figure that the Commission will either finalise at a meeting next week or through a written legal procedure, so there could be some last-minute adjustments, officials warned."The Commission departments are working on our proposal which we hope to be able to put forward next week," one Commission official told Reuters.