If the European Union (EU) is to end the long-running trade dispute with Latin America's banana supplying nations, it will have to increase its compensation offering to African, Caribbean and Pacific (ACP) exporting countries, according to new reports.
The EU is currently negotiating with Latin American nations over a reduction in banana import tariffs, with the bloc proposing cuts from the current mark of €176 per tonne to €114 per tonne by 2016.
However, ACP countries have argued that a lower tariff would severely hit its own exports, which have enjoyed duty-free access for many years.
A financial aid package of €100m has been touted by the EU, but ACP producers have dismissed it as being inadequate to cater for the socio-economic issues that could arise from a reduction in the Latin American tariff, Reuters reported.
'An update on the ACP's support needs...indicates that an envelope of close to €500m would be required to avoid social turmoil and political instability in the ACP countries concerned,' an ACP statement read.
In addition to an increase in the amount of compensation on offer, ACP nations want the tariff cuts to be smaller and phased in over a longer period of time.
Last year, the EU agreed a new banana tariff deal with Latin American nations during the Doha Round of World Trade Organisation talks in Geneva, but the offer was never cemented as wider trade talks collapsed.
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