European and Latin American negotiators closed in on a deal to end a quarter of a century of "banana wars" as part of mammoth trade talks here, sources close to the negotiations said Sunday.
"The two sides are busy putting the final touches to an agreement," a source told AFP. "If they sign, it would be an historic accord ending a dispute that has lasted for 25 years."
Latin American banana producers have over the years successfully challenged the EU's banana import regime before the World Trade Organisation on the grounds that it discriminates against them in favour of African, Caribbean and Pacific (ACP) countries - mainly former colonies of European powers.
The two sides agreed late Saturday to lower EU import tariffs to 114 euros (179 dollars) per tonne by 2016 from 176 euros per tonne currently, according to a copy of the text obtained by AFP.
The proposed deal angered ACP countries, even though their bananas enter the EU tariff-free. They cannot prevent a deal by the EU and Latin American sides, but could block any overall WTO deal on a new global free trade pact, potentially scuppering years of delicate negotiations.
The agreed tariff figure is slightly lower than a compromise of 116 euros proposed by WTO Director-General Pascal Lamy, who has acted as a mediator in the dispute. The deal also includes a so-called "peace clause," under which in effect the Latin American countries would promise not to reopen the case in return for the lower tariff.
It will be signed by the EU and 11 countries from Central and South America - Brazil, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Peru and Venezuela - as well as the United States.
The WTO's dispute settlement body in February ruled in favour of a complaint lodged by the United States. Although it does not export bananas to the EU itself, three of the largest producers with plantations in Latin America are US-based multinationals: Chiquita, Del Monte and Dole.
Panama welcomed the proposed deal Sunday. Its Foreign Minister Samuel Lewis Navarro hailed it as "favourable" to its national interests, in a statement issued in Panama City. "With it we put an end to a long dispute."
ACP countries voiced anger at the proposed deal, saying it would have a harmful impact on the competitiveness of their banana industries. "This has to change, it is no good," one diplomat from an ACP country said, confirming that the bloc was seeking a further high-level meeting on bananas with the European Union.
"If we lower (the tariff), what's going to happen? The ACP (countries) are going to be out of the market."
Ministers from around 35 nations have been meeting at the WTO since Monday to discuss cuts in subsidies and import tariffs with the aim of mapping out a new deal under the so-called Doha Round of talks. Anything approved by the 35 parties meeting here would still have to be cleared by all 153 WTO member states.
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