Costa Rica Coffee Guide

Leaders Team Up against E.U. Banana Hike

July 15, 2005

WHILE leaders of the world’s majorindustrial nations (the G-8) met inScotland last week for conversations onthe world’s poor and hungry, the leaders ofbanana-producing countries in LatinAmerica met in Costa Rica to discuss asimilar topic: the thousands within theirborders who they argue could be left poorand hungry by European Union tradepolicies.The heads of state from banana-producingcountries in Latin America metJuly 7 at the Hotel Real Intercontinental,in the western San José suburb ofEscazú, and agreed to present a unifiedfront in negotiations with the EuropeanUnion regarding increased tariffs. Thiswas the second such summit since theEuropean Union announced plans totriple its tariff on bananas exported fromLatin America, raising it from 75 euros($91.58) per ton to 230 euros ($280.73)per ton, beginning Jan. 1, 2006. The firstsummit was held in Quito, Ecuador, inJanuary (TT, Jan. 28).ACCORDING to a statement fromthe Costa Rican National Banana Corporation(CORBANA), the tariff hike couldeliminate 8,000 jobs in Costa Rica, whichexports more bananas than any other countryin Latin America except Ecuador. Anestimated 42,254 jobs are directly dependenton banana exportation in Costa Rica,which exported approximately 1.8 millionmetric tons of bananas in 2004, accordingto figures provided by CORBANA.Leaders are concerned they will beunable to compete with bananas importedfrom the African, Caribbean and Pacificcountries, whose exports will not face theincreased tariff – and that the economies oftheir countries, as well as security andsocial stability, will suffer as a result.“If, by way of discriminatory tariffpolitics, Latin American bananas areremoved from European markets,” CostaRican President Abel Pacheco said,“sooner than later we would have toexport human beings displaced fromtheir countries of origin for social andeconomic reasons.”THE hike comes as the EuropeanUnion is phasing out its previous quotasystem in favor of one based entirely ontariffs. The World Trade Organization isnow deliberating on whether the new tariffsare prohibitively high, which is thecomplaint Latin American countriesbrought before it this year; it is expected tomake a decision by Aug. 1. Both sides willthen have the opportunity to appeal.After beginning the summit with amoment of silence for the victims of theterrorist bombings in London, England,which occurred that morning, the leadersdiscussed their strategies for facing theEuropean Union. In his opening speech,Pacheco spoke of creating a LatinAmerican banana bloc.“Let me suggest that as part of ouragreements at this summit, we instructour… authorities to define the constitutionof a Regional Union of Banana-ExportingCountries that would support LatinAmerican banana exporters in their initiativesand joint efforts,” Pacheco said.THE summit closed with the signingof an official declaration voicing oppositionto the raised tariffs and asking theEuropean Union and the World TradeOrganization to take into consideration theimportance of the banana industry in LatinAmerican development.In the declaration, the leaders alsocommitted to continue working together,and to meet again in Medellín, Colombia,later this month, and in Panama on anunspecified date, to follow up on theirefforts.Present at the summit with Pachecowere Panamanian President MartínTorrijos, President of Guatemala OscarBerger, President of Ecuador AlfredoPalacios and President of ColombiaAlvaro Uribe. Nicaragua was representedby Trade Minister Azucena Castillo, andHonduras by its Secretary of ForeignRelations, Mario Fortín.Security for the event was tight, particularlybecause of the presence ofUribe, who has had two attempts on hislife this year, said Miguel Torres, head ofthe country’s Special Intervention Unit,which coordinated with Colombian securityto protect Uribe.

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