ECUADOR: World Trade Organisation talks collapse after Ecuador demands that the EU stick to it's agreement to slash import tariffs on bananas

Record ID: 561583

  • Title: ECUADOR: World Trade Organisation talks collapse after Ecuador demands that the EU stick to it's agreement to slash import tariffs on bananas
  • Date: 30th July 2008
  • Summary: (W5) SANTO DOMINGO DE LOS COLORADOS, ECUADOR (FILE) (REUTERS) PANORAMA OF BANANA PLANTATION VARIOUS OF BANANA BUNCHES FARMER WALKING BETWEEN BANANA BUNCHES
  • Embargoed: 14th August 2008 13:00
  • Keywords:
  • Location: Ecuador
  • Country: Ecuador
  • Topics: International Relations,Economic News
  • Reuters ID: LVA9U9XI6NHIWNN6XWTNTRDDKDJC
  • Story Text: A deal to settle a historic row over trade in bananas between Latin American exporters and the European Union is off after the failure of broader world trade talks on Tuesday, European trade officials said.
    The world's top banana exporter, Ecuador, reacted angrily and demanded that the EU stick to the agreement to slash its import tariffs on bananas.
    A nine-day bid to find a breakthrough in the so-called Doha round of world trade talks collapsed on Tuesday, and it was not clear when the negotiations could be revived, if at all.
    European officials said the failure also killed off a deal reached on Sunday (July 27) to change the EU's banana imports regime, which gives preferential treatment to African, Caribbean and Pacific (ACP) countries and has hurt Latin American producers like Ecuador and Costa Rica.

    "This was always linked to Doha," said Peter Power, a spokesman for EU Trade Commissioner Peter Mandelson. "This was not a stand-alone agreement and was going to be part of Doha package, so there is no banana deal as of now."
    But Ecuador's deputy trade minister, Eduardo Egas, insisted that the EU's promise to lower duties on bananas from Latin American countries was not tied to success at the broader trade talks, and he warned that Ecuador would pursue legal action.

    "We will analyse additional actions, but our first reaction is to demand that they stick to what was agreed on," Egas told Reuters.
    Europe is Ecuador's biggest market for banana exports.
    It was not immediately clear what the next steps for the WTO's global trade round would be. It risks possibly years of delay as the United States changes administration and the European Commission comes to the end of its term in 2009.
    The now defunct banana deal reached on Sunday was aimed at clearing the way for a breakthrough in the Doha talks. Under its terms, the EU would have cut its tariff of 176 euros ($277) per tonne of bananas to 114 euros by 2016.
    It angered rival exporters from former European colonies in the ACP group of countries whose bananas enter the EU with no duties as part of their long-standing trade perks with the bloc.
    Banana exports are of vital importance to the developing economies of many ACP and Latin American countries, with the latter claiming about 80 percent of the EU market.
    In Ecuador, the failure of negotiations met with disappointment from government officials.

    "Somehow, we have been left very disillusioned, given that the globalization process, the process of eliminating borders and of making world commerce easier, see themselves torpedoed precisely by decisions like this.
    Therefore, I think that the developed countries, the countries that claim to be countries that support and help the countries of the third world should give some gesture that this is really what they are doing," said Walter Poveda, Ecuador's Minister of Agriculture.
    Poveda went on to say that "they say that happiness does not last long in a poor persons home, and this more or less sums up what has happened.
    Yes, it has taken us by surprise since we thought that we have managed something that has been 15 or 16 years in the making. Similarly, the process of lowering duties and tariffs that they had proposed has not been a rapid process, nor was it totally satisfactory, but we hoped that the continuation of these conversations had made our position better. Hopefully not all is lost that and that our representatives have done their duty."
    Latin American producers and the United States, acting on behalf of U.S. fruit distributors, have won nearly a dozen legal challenges to the EU's banana import regime.
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