Panama News

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By Jeremy Smith BRUSSELS, July 17 (Reuters) - Panama, a major banana exporter to the European Union, will fight hard at world trade talks next week for deeper and more immediate cuts to EU import tariffs, its top trade negotiator said on Thursday. Last week, World Trade Organisation Director-General Pascal Lamy proposed the EU should make annual cuts to its tariff of 176 euros ($280)/tonne of bananas to reach 116 euros by 2015. In return, Latin American governments would sign a "peace clause", dropping lawsuits against the European Union that they filed over its single-rate tariff which they say is too high and discriminatory, and also agreeing not to launch more challenges. (more)


The European Commission, which negotiates foreign trade policy on behalf of the EU's 27 member countries, says it accepts Lamy's proposal as a basis for an agreement.


But Panama, as well as other Latin American banana-exporting countries, will be pushing hard next week for better terms.


Ideally, the Commission wants to resolve the tariff row outside a wider WTO deal for the Doha round of trade talks, where the EU has offered to cut farm import tariffs across the board provided its main trading partners make concessions too.


In a joint statement, Panama's WTO ambassador and the country's chief trade negotiator said Latin American banana exporters were entitled to receive a substantial cut applied to the existing EU tariff, "plus proper Doha cuts on top of that."


"They are willing to be reasonable in the interest of settling this long dispute, but will need to see a better starting reduction, phase-in period and final rate than the one the EC (European Commission) is willing to accept," the statement said.


"Panama is ready to support a solution that encompasses these elements," trade negotiator Leroy Sheffer said.


The EU has been at loggerheads with Latin American exporters for over a decade because it offers preferential terms fo rival exporters in the ACP group of former European colonies, which have no tariffs on their banana exports.


The banana issue could be a stumbling block in next week's crucial WTO talks in Geneva.If bananas get dragged into the wider negotiations on farm tariffs, then the Lamy proposal could also face a veto from ACP countries which do not want rival Latin American banana exporters to grab a larger share of the lucrative EU market.


"Next week is crucial because we all will have the opportunity to find a solution in the context of the DDR (Doha Development Round), the WTO being the proper place to concentrate efforts for resolving this long standing dispute," Sheffer said. (Editing by Peter Blackburn)

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