European Union Requests Second Banana Ruling

THE European Union this week requested a second round of World Trade Organization (WTO) arbitration on its revised tariff of 187 euros ($230) per ton of bananas imported from Latin America. The WTO earlier this year rejected the proposed E.U. tariff of 230 ($283) euros per metric ton, saying it would deny Latin American producers fair access to the European market.The leaders of banana-producing nations in Costa Rica have protested this revised tariff, saying it is still too high (TT, Sept. 16).The European Union announced last year that it would raise tariffs on Latin American bananas beginning Jan. 1, 2006 from 75 euros (approximately $92) to 230 euros ($276) as a way of phasing out its previous tariff system based on quotas. The move would also favor banana producers from African, Caribbean and Pacific (ACP) countries.The move angered Latin American producers, and leaders and representatives from Costa Rica, Panama, Nicaragua, Honduras, Guatemala, Colombia and Ecuador met in here in July to discuss a common front for facing the proposed tariffs, which many leaders have said would cost their economies thousands of jobs (TT, July 15).In Costa Rica, which produces more bananas for export than any other Latin American country except Ecuador, more than 40,000 jobs depend directly on the industry and 8,000 jobs could be eliminated if the tariff increase goes into effect, according to statistics from the Costa Rican National Banana Corporation (CORBANA).Costa Rican Trade Minister Manuel González has said that the Latin American countries will take the issue to the WTO conference to be held in Hong Kong in December.