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Monday 21st July 2008, 09:03 Central Time

Banana dispute threatens to derail Doha

There is no immediate sign of a resolution in the long-running WTO banana dispute

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World Trade Organisation (WTO) negotiators have failed to strike a deal in the long-running banana trade dispute between Latin American countries and the European Union on the eve of the Doha summit in Geneva.

Pundits feared the continuing impasse over EU banana imports threatened to derail make-or-break Doha round talks on a global trade pact.

Three days before WTO representatives convened in Switzerland on 21 July, the EU's representative to the WTO announced that Latin American countries had rejected a banana trade compromise brokered by WTO director-general Pascal Lamy.

"The Latinos are not accepting the good offices or the solution proposed by Pascal Lamy," EU ambassador Eckart Guth told reporters. "This process is over but the proposal of Pascal Lamy is still on the table."

But a senior diplomat from Ecuador, the world's biggest banana exporter, told Reuters on 18 July the Latin American producers were still willing to negotiate.

Mr Lamy's compromise would see EU import tariffs for Latin American bananas fall to €116 per tonne (from €176) by 2015, with an initial cut of €26, in exchange for a "peace clause" in which Latin American countries would drop WTO lawsuits against the EU and mount no further challenges.

Colombia has accepted the deal, but other Latin American growers say the numbers are not generous enough.

"For the time being we don't agree on that but we think that we could keep on negotiating and we could find a balanced approach over this issue," said Cesar Montano Huerta, the second most senior diplomat in Ecuador's WTO mission, on 18 July.

Mr Montano Huerta said the gap between the EU and Ecuador's position was not wide, with Ecuador proposing a final tariff of €109, reached over 5 years with a downpayment of €35.

Other Latin American growers such as Panama and Honduras favour even lower EU tariffs.

The EU gives duty-free access to bananas from former European colonies in Africa, the Caribbean and Pacific (ACP).

ACP countries are opposed to low EU tariffs for Latin American bananas, claiming their economies would suffer to the point of ruin from resulting loss of exports.

The banana dispute represented one of 30 outstanding issues to be resolved at the Doha Round of talks before a global trade framework could be agreed.

The week-long Doha Round of talks – named after the capital of Qatar where they began in 2001 – opened on 21 July, with 152 countries involved.

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