A new European Union tariff on imported bananas has been declared illegal by the World Trade Organization, according to the BBC.
The WTO backed a claim brought by Latin American countries, who argued the EU tariff would have a “devastating effect” on their economies and exports.
Under a EU system set for launch in January 2006, imports faced a tariff of €230 (US$280.30) a tonne.
The new tariff had aimed to safeguard exports from countries in the African, Caribbean and Pacific group.
Most were former colonies, and for years their banana crop had received preferential treatment.
Currently, Latin American exports to the EU are limited, with the duty per tonne set at €75 euros for the first 2.7m tonnes of exports, rising after that to €680 per tonne.
Under the new regime, ACP producers would have continued to export bananas duty-free.
Proposals to replace quotas with higher duties would have cost producers more and threatened livelihoods, the group of Latin American countries had claimed.
A report by the WTO said the new tariff would “would not result in at least maintaining total market access” for Latin American exporters.
It also questioned the way in which EU arrived at its decision to impose the 230 euros charge, but it did not suggest a new figure.
Latin American producers welcomed the decision, and Brussels now has 10 days to enter discussions with the nine Latin American exporters.
“We will start consultations with interested parties without delay,” EU Trade commissioner Peter Mandelson said.
“I hope that everyone will cooperate in finding a mutually acceptable solution within the strict deadline set by the WTO.”
Meanwhile a statement from the European Commission added that if the two sides fail to reach agreement it would request a second round of arbitration.
Following a series of rows in the 1990s – known as the “banana wars” – the EU was forced to introduce a new set of tariffs for the fruit by 1 January 2006, as the present system was regarded as discriminatory towards US and Latin American companies.
However, in the latest WTO case the Latin American producers – Ecuador, Colombia, Costa Rica, Guatemala, Honduras, Panama, Brazil, Nicaragua and Venezuela – argued the new rate broke a WTO-brokered accord that the changes should “at least maintain” their access to the EU market.
Latin American producers currently make up about 60% of the market, with African and Caribbean producers taking a further 20%.
EU-grown bananas – mainly from Spanish and French islands – make up the final 20%.