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More Banana Woes for the region as the EU Loses Latest WTO Battle

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Tuesday, August 02, 2005 - The World Trade Organisation ruled Monday that a new EU tariff on imported bananas is illegal. A WTO arbitration body backed a claim by Latin American countries - including Brazil, Colombia and Venezuela – indicating that the proposed EU tariff of 230 euros per tonne would have a "devastating effect" on the development of their economies and would seriously limit their ability to export the fruit.

The EU had hoped the new regime, which was conceptualized after its previous system of tariffs and quotas had also been ruled illegal, would strike a balance between the demands of large-scale growers in Latin America and interests of traditional suppliers in Africa Caribbean and the Pacific.

Some Caribbean officials including St. Lucia’s Agriculture Minister Ignatius Jean have criticised the WTO ruling, saying it will hurt the region's vital banana exports by squeezing producers out of the crucial European market.

“We’re certainly not happy with the decision. It has always been very difficult to communicate this matter to the banana farmers and the people of the St. Lucia in particular and the Caribbean in general. People often try to dismiss the issue and try to confuse the farmers about what the government has tried to do in this regard, and we all can see that the decision does not rest with the government of St. Lucia. It is a decision of the WTO, which governs all trade around the world,” Minister Jean said.

St. Lucia and other Caribbean banana producing countries, Minister Jeans said are wasting no time and will continue to lobby in order to strike a deal with the Latin Americans to find an amicable resolution in this matter

“As the Ministry of Agriculture, we will be forwarding a document to the Cabinet of Ministers so that we will continue to review the ruling of the WTO and to see all the possible consequences, reviewing our strategies and looking at the way forward. Of course in all of this we will continue to keep the banana farmers informed,” said the St. Lucian Agriculture Minister.

Despite the win, the Latin Americans have not suggested a new figure. The EU now has 10 days in which to enter into consultations with the Latin American group, which also includes Costa Rica, Ecuador, Guatemala, Honduras, Nicaragua and Panama. If they are unable to agree on a new tariff in that time, both parties can then request another arbitration procedure. The process must be completed before the new tariff is due to enter into force on January 1st 2006.

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