EU moves to end banana war

Latin American banana producers want a fairer share

The European Union has adopted a new banana import system in a attempt to end a long-running trade dispute with the United States.

Washington has argued that the EU discriminates against American companies and their producers in Latin America in favour of banana growers in former European colonies in Africa, the Caribbean and the Pacific.

It won't satisfy the WTO, the United States or the Caribbean producers, this will be back before too long

British Government Spokesman

In retaliation, the US imposed sanctions amounting $191m a year against European goods ranging from handbags to bed linen.

Under the new EU rules, import rights will be granted as ships arrive at port, in what has been described as a 'first come, first serve' system, with quotas stilll being in place.

In 2006 that system will be replaced by a system of tariffs that EU agriculture ministers argue complies with WTO rules.

At the port

"This proposal is the best available solution to a problem which has lasted too long," EU Farm Commissioner Franz Fischler said.

Under the new system import licences will be distributed as ships arrive at the port.

Fischler - the 'best available solution'

The World Trade Organisation (WTO) ruled last year that EU's system unfairly favoured growers in EU territories and the Caribbean over Latin American producers, which are marketed by US multinationals Chiquita Brands International and Dole Foods.

But Britain, the only country to vote against the new plan, said it did not think it was a solution to the trade dispute.

"It won't satisfy the WTO, the United States or the Caribbean producers, this will be back before too long," a government spokesman told reporters.

Divisions

US companies are divided on the merits of a first-come- first-served system, which Washington has already indicated it is also unhappy with.

Caribbean producers have enjoyed EU support

But Ecuador, the world's largest banana exporter has signalled it would accept the new EU system.

The EU says the aim is to eliminate the distinction between traditional banana exporters, and those who started more recently, like some Latin American countries.

But the BBC's Justin Webb in Brussels says it is highly likely that the damaging transatlantic spat will continue for the foreseeable future.