DAVOS, Switzerland, Jan 30 (Reuters) – Costa Rica expects the European Union to make a new offer on bananas next month in an attempt to resolve the world’s longest-running trade dispute, Foreign Trade Minister Marco Vinicio Ruiz said on Friday.
Settling the row would end a decades-long dispute that has poisoned relations among dozens of countries and remove an obstacle to an overall deal in the World Trade Organisation’s Doha round to free up global commerce.
It would also help foster trade ties between Europe and Latin American countries grouped in the Central American Customs Union, which is negotiating a trade deal with Brussels.
“It’s been told (said) in this same week that the EU will make an offer, will do something, in February,” Ruiz told Reuters after arriving in the Swiss ski resort of Davos for the World Economic Forum following talks in Brussels.
“I definitely believe that the EU wants to solve the problem,” he said. Ruiz said officials from Ecuador, the world’s biggest banana exporter, had heard the same thing. He met officials from Ecuador during his trip to Brussels.
Costa Rica is the coordinator at the WTO of the tropical products countries, a group of mainly Latin American farm exporters. The EU’s banana import regime offers preferential access to its markets for the African, Caribbean and Pacific (ACP) countries, a large group of mainly poor developing countries that are mostly former European colonies.
Under WTO pressure, Brussels has tried to reform the system, but the Latin American countries say it is still unfair.
The two sides reached a deal on the sidelines of a meeting of ministers last July seeking a breakthrough in the Doha talks.
But the ACP countries and the EU producers in the French Caribbean and Spanish Canary Islands objected to the deal. When the July talks collapsed, the EU walked away, saying it was linked to a Doha agreement.
The Latin Americans say it was a separate pact.
OBSTACLE TO BROADER DEAL
The bananas row could block the broader trade deal because Doha proposals would allow both slower tariff cuts on produce from poor ACP countries and steeper cuts on tropical produce from the Latin Americans.
The two groups need to decide which produce goes on which list. The Latin Americans have dropped some products that were under contention, but bananas remain a target for both groups.
Pressure on the EU to settle the dispute grew in November when the WTO’s top court ruled yet again against the EU. Ecuador said last month it could exercise its right to impose trade sanctions on the EU if the row is not resolved.
The dispute is an embarrassment for the EU, which supports the rules-based trading system represented by the WTO.
Under the regime introduced in 2006, Brussels charges a tariff of 176 euros a tonne on Latin American bananas while letting in ACP fruit duty-free.
The WTO ruled this was discriminatory and said the previous EU regime, which admitted a quota of 2.2 million tonnes of Latin American bananas with a tariff of 75 euros a tonne, was still in force.
Last July’s deal would have cut the tariff to 148 euros this month with further cuts to 114 euros by 2016.