Major banana exporter Ecuador has stated its opposition to the new US-EU trade pact. The US and the EU may have ended their quarrel over bananas, but not everyone’s happy. Ecuador’s opposition to the deal adds to Dole Food’s misgivings; both feel that a ‘first-come first-served’ system would be much fairer. However, given the enormous clout the US and the EU have in global trade, it remains to be seen whether the protests will have any effect.

The eight-year banana war may be over, with the new scheme allowing the EU to distribute banana import licenses in a complex system that should provide a boost to imports from companies like Chiquita. But Ecuador, one of the world’s biggest banana growers and exporters with $820.5 million in exports last year, has now said it isn’t satisfied with the bilateral agreement in its current form. Ecuador’s opposition adds to complaints from Dole Food, a major US exporter, which said last week that the accord would hurt its business.


Ecuador is unhappy that it wasn’t consulted during the negotiations and was presented with the accord only after the fact. “In defense of more than two million Ecuadorians who earn a living in the banana industry, the government of Ecuador will not declare the banana war over until there’s a fair agreement that takes into account the basic rights of the world’s premier banana exporter,” Ecuador’s government said.


Conditions under the US-EU agreement would hurt those exporters that did not ship many bananas into the EU during the agreed period of 1994-96. This is why Dole, whose market share has grown since the mid-1990s, has attacked the agreement. The alternative system that the EU was planning to implement, but eventually dropped, would have favored a more open export regime, with licenses distributed on the basis of banana volumes that a company can deliver to EU ports today. Ecuador has been lobbying for this ‘first-come-first-served’ system.


For now, Ecuador is seeking a clarification of the US-EU accord. If it doesn’t like what it sees, Ecuador could challenge the agreement at the World Trade Organization. The European Commission’s trade negotiators concede that Ecuador would have been better off under the first-come-first-served system, but say that the new US-EU accord would still improve Ecuador’s position compared with the old system of country quotas. And it’s highly questionable whether Ecuador has enough influence to force the reconciled global trade giants to change their plans.


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