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Monday, February 09, 2009

Ecuador banana exporters warn against EU trade deal

By Jeremy Smith

BRUSSELS, Feb 5 (Reuters) - Ecuador should not bother negotiating a free trade deal with the European Union until there is an acceptable cut in the EU's banana import tariff, the country's leading banana exporter group said on Thursday.

Ecuador, the world's largest banana exporter, has led pressure from Latin America for the EU to stick to a tariff-cutting deal negotiated in July on the sidelines of a Geneva meeting of ministers seeking a breakthrough in the WTO's Doha round.

When the WTO talks collapsed, the EU walked away -- saying the banana deal had to be part of a wider Doha agreement. The Latin Americans continue to insist that it is a separate pact.

In the meantime, the European Commission, which negotiates foreign trade on behalf of the EU's 27 member countries, has been pressing forward with talks aimed at securing free trade agreements (FTAs) with several Latin American countries.

Eduardo Ledesma, Executive Director of the Association of Ecuadorean Banana Exporters, said bananas had become a symbol of how Europe intended to treat Ecuador's developing economy.

"If the EC refuses to respect Ecuador's WTO-protected rights on bananas, one of the country's largest export products, no other sector of Ecuador's trade should expect any better in a new FTA," he said in emailed comments obtained by Reuters.

"Until the EC can show that it will honour our existing WTO rights and agreements on bananas, it makes no sense to pursue new trade agreements with the EC," Ledesma said.

In November, the WTO's top court ruled again against the EU in what has turned into the world's longest-running trade dispute. The following month, Ecuador said it could exercise its right to slap sanctions on the EU if the row was not settled.

"Ecuador has already said that if the EC tries to dilute the July agreement it will take retaliation and other legal measures against the EC to protect our WTO rights," Ledesma said.

Under the July deal, the EU would have cut its banana import tariff of 176 euros ($225.7) per tonne to 114 euros by 2016, with an initial cut next year to 148 euros.

That angered rival exporters from former European colonies in the ACP group of countries whose bananas enter the EU with no duties as part of their long-standing trade perks with the bloc. African producers, like Cameroon, were particularly annoyed.

"This dispute cannot be solved by less relief than the EC already promised to Ecuador last July. Fewer bound cuts or longer phase-in periods will not move us forward and are nothing but cover-ups," Ledesma said.

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