**The European Union has agreed a deal to cut tariffs on banana imports, potentially ending the world’s longest-running trade dispute.**Banana producers in Latin America will be subject to lower EU import tariffs as a result of the deal.
This should make them more competitive with producers in Africa and the Caribbean, who pay no tariff.
The price consumers pay for bananas could fall by 12% as a result, experts have predicted.
Duty on imported bananas will be cut from 176 euros per tonne to an initial 148 euros, (£158; $256 to £133; $215). Further cuts will be made on an annual basis over the next seven years to 114 euros per tonne.
The deal is expected to be “initialled” in Geneva later, the BBC’s europe business reporter Nigel Cassidy says.
Long-running dispute
BANANA WARS: STORY SO FAR
- 1993: EU imposes first Europe-wide tariffs on banana imports from non-APC countries
- 1996: Ecuador leads Latin American countries in complaining to the WTO about the tariffs
- 1999: WTO allows US trade sanctions on EU exports for the first time after declaring banana tariffs illegal
- 2000: A new EU deal on tariffs is rejected by the US
- 2001: Banana war declared “over” as US-EU deal is struck on tariffs promising change by 2006
- 2005: Proposed new EU banana tariffs declared illegal by WTO, following complaints
- 2006: Ecuador again complains to the WTO
- 2008: EU tariffs again declared illegal by the WTO, upholding the latest complaints from Ecuador and the US
- 2008: EU trade commissioner warns that global trade deals at risk due to banana wars
- 2009: EU signs new deal with Latin American producers, fuelling new hopes of an end to banana wars
Q&A: The banana wars
The agreement potentially brings to an end the banana wars trade dispute which began 16 years ago with the establishment of European tariffs on banana imports.
Latin American banana producers, together with the US, have long complained that the system is unfair as it favours banana producers in former European colonies in Africa, the Caribbean and the the Pacific, who are not required to pay the tariff.
This view has been supported by the World Trade Organisation, which has declared the banana tariffs illegal.
Although not a banana producer itself, the US is home to some of the biggest banana producers operating in Latin America, including Del Monte and Dole.
Compensation package
The move is likely to disadvantage the banana industries in Africa, the Caribbean and the Pacific (known as the ACP countries), who do not pay tariffs on imports to the EU.
Many of them have economies heavily reliant on banana production, and rely on the EU tariffs to secure them access to the European market.
A compensation package for the ACP countries, worth 200m euros, is included in the deal.
The European banana market is the largest in the world, with 5.5 million tonnes of the fruit imported last year.