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18th Jan 2019

MEPs approve controversial banana deal

The European Parliament on Thursday (3 February) approved a tariff deal between the EU and Latin American banana producers, marking the end of a 16-year long trade war. MEPs also urged the bloc to boost its compensation aid to the 10 former European colonies in Africa and the Caribbean (ACP) which stand to lose from the deal.

Under the new accord, the EU is set to lower import tariffs on bananas from Latin American countries from €176 per tonne to €114 in 2017, narrowing somewhat the gap with producers from former EU colonies, who are currently exempt from paying tariffs.

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  • Banana growers are keen on exporting tariff-free to the EU (Photo: Banana Link)

In parallel, the bloc is expected to boost its aid to the 10 ACP states - Belize, Cameroon, Cote d'Ivoire, Dominica, Dominican Republic, Ghana, Jamaica, Saint Lucia, Saint Vincent and the Grenadines and Suriname.

The countries are getting €200 million in aid in the 2010 to 2014 period. But MEPs want this to be topped up and extended to 2020 to help them to diversify their economies.

French Green MEP Catherine Greze, who had voted against the deal, said that the agreement was a "blow to developing countries and small banana producers" that will benefit big fruit exporters such as US giant Chiquita.

Banana producers from the EU's overseas territories in the Canary Islands, Guadeloupe, Madeira and Martinique also slammed the EU deal.

"We regret that the end of hostilities, which was the main advantage meant to result from the Geneva agreement on bananas, has been challenged by new concessions that are unjustified and benefit only the multinationals," the Association of European Banana Producers (APEB), representing 15,000 small farmers, said in a statement.

The Geneva agreement - a WTO-sponsored deal in 2009 between the US, the EU and Latin American banana-producing states - ended a 16-year-long international trade dispute and latest paved the way for the latest EU agreement.

In the meantime, some Latino producers, such as Colombia and Peru, have negotiated tariffs well below the €114 line with individual EU countries on a bilateral basis. Brazil is angling for 200,000 tonnes' worth of zero tariff bananas. But, others, like Ecuador and Guatemala, had held out for the EU-wide deal, complicating the picture, and breeding resentment.

"Contrary to what the EU Commission claims, the Geneva agreement doesn't put an end to the banana war" the APEB producers noted.

The EU is the world's largest banana market and more then 70 percent of the yellow fruit sold in the EU comes from Latin America - mainly Ecuador, Colombia, Costa Rica and Panama.

Around 20 percent of bananas originate in former colonies Cameroon, Cote d'Ivoire, the Dominican Republic, Belize and Surinam. The rest are grown on EU territories: Cyprus, Greece, Madeira, Canary Islands and French overseas departments of Guadeloupe and Martinique.

The "banana trade war" began in 1993 when the EU established a preferential policy for imports from former British and French colonies, but earlier tensions date back as far as the 1970s.

The importance of the banana trade in Latin American history is clear to see in Guatemala. A 1954 coup d'etat in the country - broadly supported by the United Fruit Company (nowadays known as Chiquita) - plunged it into a 40-year period of dictatorships and civil war, costing the lives of over 200,000 citizens.

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