The Wall Street Journal
BRUSSELS -- Officials from a group of Caribbean banana-producing countries Thursday said the World Trade Organization should approve a waiver allowing the European Union to maintain preferential trade with 71 African, Caribbean and Pacific, or ACP, countries.
Several Latin American banana-exporting countries, notably Ecuador and Panama, want the 135-member WTO to block the waiver to put pressure on the E.U. to reform its banana-import system.
But John Horne, St. Vincent's trade minister and president of the ACP council of ministers, said the waiver is much too important to ACP countries to have it blocked by the Latin American banana-producing countries.
"There's relatively few benefits for banana producers" in the ACP waiver, Horne said. "How can we hold up this much broader agreement because of bananas? It's not fair to use something so narrow as a wedge to block the waiver."
A Panamanian diplomat said Panama doesn't want to block the waiver, but instead would like to make sure that its concerns on bananas are met.
The diplomat estimated that Panama has lost $1.7 billion in sales between 1993 and 1997 because of the E.U.'s banana-import system, which favors exports from the ACP at the expense of Latin American producers.
The E.U.'s current tariff-quota system has been ruled illegal by the WTO. Last April the WTO allowed the U.S. to impose trade sanctions worth $191 million a year against E.U. goods, and last Friday Ecuador received the WTO's go-ahead to impose $202 million in annual sanctions against the E.U.
Latin American countries and the U.S., pressured by such companies as Chiquita Brands International Inc. (CQB) and Dole Food Co. (DOL), which market Latin American bananas, have led opposition to the E.U. banana-import system.
The WTO waiver is part of a new E.U.-ACP pact that will transform the current E.U.-ACP Lome convention of mostly trade preferences and price support programs into a system of trade and cooperation pacts with individual nations, to comply with WTO rules and to ensure their adoption to gradual trade liberalization.
The new pact, which was concluded in early February, includes a request for a WTO waiver, which among other things will ensure the rollover of several preferential trade protocols for bananas, sugar and rum.
The WTO waiver application requires a 75% majority approval among WTO member countries.
Edwin Laurent, ambassador of the Eastern Caribbean States to the E.U., said that the effort to block the waiver could end up hurting ACP countries.
The Caribbean officials support the E.U.'s current banana-import system, and are opposed to a tariff-only approach.
Laurent said banana exports are extremely important for St. Lucia, St. Vincent and Dominica, with 14% of their gross domestic product coming from bananas.
He said that Caribbean countries, which have mostly small, family-owned farms, couldn't compete with the large banana plantations in Latin America if the E.U. adopted a single tariff for banana imports.
-By Matthew Newman; 322-285-0133; matthew.newman@dowjones.com
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