The Geneva Agreement on Trade in Bananas, was officially signed in the WTO in Geneva on Monday, May 31st, 2010, between the E.U. and a group of Latin American countries including Colombia, panama, Ecuador, Costa - Rica, Honduras, Guatemala, Peru, brazil, Mexico, Nicaragua and Venezuela. This Agreement is named the “Geneva Agreement on Trade in Bananas”. It comes in parallel to a complementary Agreement that was signed between the U.S. and the E.U. on the same issue. This latter agreement is named the “Agreement on Trade in Bananas between the United States of America and the European Union”.
This Agreement puts an end to the long-standing conflict in the history of the multilateral trading system that lasted for around 18 years. This dispute started when Costa Rica submitted a complaint to the GATT Council in 1991 about the European banana imports regime, that favored the group of African, Caribbean and Pacific countries. This favors arises from the fact that these countries were predominantly former European colonies. The banana imports from these countries were exempted from tariff duties in the E.U. Later on, each of Ecuador, Guatemala, Nicaragua, Venezuela and Colombia joined this complaint. The U.S. also joined this complaint in 1999.
Under the agreement with the Latin American countries, the E.U. will carry out gradual cuts in tariffs on bananas starting from 176 Euros per ton and ending by 114 Euros per ton by 2017. The Agreement will be applied retroactively as of December 15, 2009, the date of its initial signing in Geneva. Banana exporters will be able to ask for compensation for the amount of tariffs exceeding the newly agreed levels since the said date of application.
While for the agreement with the U.S., both parties agreed not to proceed in further procedures under the WTO Dispute Settlement Body in this regard. In return, the E.U. will only apply the MFN rate on all banana imports from WTO members indiscriminately. The E.U. will also refrain from applying any other imports barriers including quotas, tariff rate quotas or import licensing requirements. This E.U. commitments takes place, but for the preferential agreements that it signed in conformity with the WTO principles.
Some Latin Armenian countries including Peru, Colombia, Costa - Rica, Guatemala, Honduras, El - Salvador and Nicaragua, will enjoy further preferential cuts under bilateral agreements with the E.U. Bananas imported from these countries will face 75 Euros per ton by 2020. Ironically, Ecuador which is the largest global bananas exporter, hasn’t yet been engaged in a bilateral agreement with the E.U. This is despite the fact that it has a great interest in lowering the tariffs facing its exports of bananas in the E.U. markets.
These EU bilateral has instigated ACP countries’ concerns about their impact on the competitiveness of their exporters of bananas. In contrast, the Latin American countries encourage the E.U. to expedite the application of the agreed tariff cuts.
India and Pakistan expressed their dissatisfaction with the new tariff levels endorsed by the Geneva Agreement, and asked for further liberalization of the E.U. market.
