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Caribbean community questions Ecuador challenge to EU banana tariffs

GEORGETOWN, Guyana (AFP) -- The 15-nation Caribbean Community on Friday questioned Ecuador's challenge before the World Trade Organization to European banana tariffs Quito calls unfair.

Ecuador on Thursday revived a long-running challenge to EU regimes that allow bananas from many former European colonies to enter duty free, while charging tariffs for bananas from Latin America.

Current chairman of Caricom's Council for Trade and Economic Development, Belize Foreign Affairs and Foreign Trade Minister Eamon Courtenay, said the region vowed to prove that Latin American bananas enjoy sufficient access to the market.

"All the data now shows for the last nine months that in fact they are entering the market, in fact their exports to the European Union has increased," Courtenay told AFP.

Imports from Latin America as a whole rose by 8.2 percent in the first eight months of the year on an annual basis, accounting for four fifths of all banana imports to the EU, according to EU statistics.

However, Ecuador's share of the European banana import market fell to 27.5 percent in the first eight months of the year from 29.9 percent in the corresponding period in 2005, according to the EU statistical agency Eurostat.

Europe charges 176 euros (225.6 dollars) per ton on bananas imported from Latin America, while bananas enter duty free from the African-Caribbean-Pacific (ACP) zone formed mainly of former European colonies. The Belizean minister said Caricom planned to tell the EU that it could not buckle under pressure from Ecuador and other Latin American banana producers. "The evidence is clearly on our side."

"Now that the evidence is there, we should be able to prevail," Courtenay said.

Bananas Europe imported from the ACP posted a higher percentage increase in the same period, rising 18.2 percent. ACP market share rose to 20.5 percent from 19.1, while Latin America's share dipped to 79.5 percent from 80.9.

Negotiations were launched in December 2005 in Hong Kong with Norway mediating between the EU and banana producing countries in Latin America and ACP countries to resolve the dispute.

The overall duty of 176 euros replaced a duty of 75 euros per ton of imports within a quota and of 680 euros per ton for imports exceeding the quota.

On Tuesday, the European Commission said that it would prolong through 2007 an import quota of 775,000 tons for ACP countries.

Before the new arrangement came into force on January 1, Latin American countries had twice succeeded with complaints at the WTO against EU proposals.

Initially, the EU had wanted to apply a duty to non-ACP bananas of 230 euros per ton, subsequently revised down to 187 euros.

The EU commission says that the new rules do not single out Latin America. Commission figures published at the end of September showed that imports of bananas from Latin America increased by 6.0 percent in the first half of this year from the figure for the same period of last year.

EU Agriculture Commissioner Mariann Fischer Boel said then that the complaints from Latin America were unjustified.

At the end of September, the commission proposed reforms to EU aid to banana producers in the European Union. Under these regulations, automatic subsidies to compensate for changes in market prices would be abolished.

The Spanish Canary Islands, Martinique and Guadeloupe, which are French, and Portuguese territories Madeira and the Azores produce most of the bananas within the EU but this production satisfies only 16.0 percent of EU demand, the commission says.