Banana Wars, Now At An End

By: Ainsley Brown

It is now official the Banana Wars are now at an end.

The protracted – 16 years – trade dispute over bananas between the European Union (EU), Latin American countries and the United States is now officially over. The Banana Wars, as they have come to be known even if somewhat inaccurately because while banana are the principle tropical fruit involved it is not the only one, is of personal interest for me. As previously covered on this site, the Banana Wars, was a direct reason why I wanted to become a lawyer.

According to the terms of the agreement the EU will cut tariffs on imported bananas from Latin America, currently at €176 per tonne to €114 per tone over the next seven years. Additionally, the will be a very generous initial reduction of €148 per tonne. In exchange for these reductions the Latin American nations and the US have agreed to drop their World Trade Organization (WTO) case against the EU. This part of the agreement contains a peace clause between the parties where the Latin Americans and the US agree not to initiate further WTO cases as soon as the agreement is sign rather than wait until the tariff changes are registered with the WTO. The formal registration – certification – with the WTO could take months or even years depending on if other WTO members challenge the tariff changes.

The ACP (Africa Caribbean and Pacific) nations are the real losers here. It must always be remembered that the preferential market access granted to the ACP, largely due to their former colonial connections to Europe, was at the heart of this trade row. Please don’t get me wrong, this is a deal that had to be done, I simple mean to point out the potentially devastating impact this could have on certain already struggling ACP economies.

However, the ACP has not been left entirely out in the cold. The EU as agreed to a €200 billion aid package to lessen the impact of the loss of preferential market access. The EU has still to make clear how this money will be doled out amongst the many different ACP nations with their varying economic conditions, interest and priorities.

To end on a positive note, ending the Banana Wars could have a positive impact on trade discussions between the EU and Latin American countries and inject new life into the stalled Doha Round of WTO talks.

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