President to Attend Banana Summit in Ecuador

January 14, 2005

PRESIDENT Abel Pacheco will travelto Ecuador Jan. 25 to attend a summiton how Latin American countries willhandle pending banana tariff changes inthe European Union that could dramaticallyaffect trade.At the Jan. 26 summit, leaders fromLatin American banana-producing nationshope to reach a consensus on how toapproach new EU banana tariffs of 230euros ($300) per ton beginning January2006.Pacheco said Tuesday at his weeklyCabinet meeting that the summit is “decisivefor the future of Costa Rica” andLatin American countries must come to anagreement on the issue without furtherdelay.The new tariffs will replace the presentsystem, which uses tariffs, quotas andlicensing to protect African, Caribbeanand Pacific-rim (ACP) countries. Thechange comes in response to demandsfrom the World Trade Organization thatthe European Union liberalize its market.The European Commission proposesallowing ACP countries to continue withouttariffs.Producers in Latin America such asChiquita, Dole and Del Monte arepresently limited to exporting 2.2 milliontons annually with tariffs of 75 euros($97.5) a ton. The European Union is thesecond most important market for LatinAmerican producers, after the UnitedStates.While Latin American countries areworried that under the new rules U.S.businesses will abandon the region forAfrica to take advantage of zero tariffs,ACP countries fear that the disappearanceof the quotas will result in the inundationof the market with Latin Americanbananas (TT, July 16, 2004).At the summit, Costa Rica will defend atemporary system of quotas and licensing,with a tariff of 75 euros, until a betteroption appears, the daily La Nación reported.However, the Ministry of ForeignCommerce said this week officials have notyet defined an official stance.Ecuador is the number-one banana producerin the world, followed by Costa Rica.After the summit in the port city ofGuayaquil, Pacheco is scheduled for anofficial visit with Ecuadorian PresidentLucio Gutiérrez before returning to CostaRica Jan. 28.

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