Friday, November 17, 2006

GENEVA, Switzerland (AFP): Ecuador launched an attack on the European Union's banana import regime at the World Trade Organization on Thursday, complaining it was unfair to Latin American producers, diplomatic sources said.

A diplomat, who declined to be named, said: "The banana war begins again."

Ecuador is challenging in particular an EU customs duty of 176 euros (225.6 dollars) per tonne on bananas imported from Latin America.

Ecuador said in its complaint that this duty meant that Ecuadorian producers could not maintain their share of the EU market, a trade source said.

The complaint is the first to challenge the EU rules on imports of bananas since the new arrangements took effect on January 1.

The new rule applies to bananas from outside the African-Caribbean-Pacific zone formed mainly of formerly European colonies.

These ACP countries have duty-free access to the EU market. Countries in Latin America, which are more competitive, have attacked this preferential arrangement for years.

Latin American countries accepted the principle of the arrangement, however, when under an agreement between all members of the WTO in 2001 the EU agreed to introduce modifications by January 1, 2006 at the latest.

The overall duty of 176 euros replaced a duty of 75 euros per tonne of imports within a quota and of 680 euros per tonne for imports exceeding the quota.

On Tuesday, the European Commission said that it would prolong through 2007 an import quota of 775,000 tonnes for ACP countries.

Before the new arrangement came into force on January 1, Latin American countries had twice succeeded with complaints to the WTO against EU proposals.

Initially, the EU had wanted to apply a duty to non-ACP bananas of 230 euros per tonne, subsequently revised down to 187 euros.

The EU commission says that the new rules do not single out Latin America. Commission figures published at the end of September showed that imports of bananas from Latin America increased by 6.0 percent in the first half of this year from the figure for the same period of last year.

EU Agriculture Commissioner Mariann Fischer Boel said then that the complaints from Latin America were unjustified.

At the end of September, the commission proposed reforms to EU aid to banana producers in the European Union. Under these, automatic subsidies to compensate for changes in market prices would be abolished.

The Spanish Canary Islands, Martinique and Guadeloupe which are French, and Portuguese territories Madeira and the Azores produce most of the bananas within the EU but this production satisfies only 16.0 percent of EU demand, the commission says.

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