Caribbean Community (Caricom) countries have warned that they might walk away from any consensus on global trade talks if Latin American banana producers are successful in under-mining the Caribbean's export preferences for the fruit in the European market.

Under a regime that came into effect two and half years ago, the African, Caribbean and Pacific (ACP) group of countries - the more than 70-member bloc with which the EU had a long-running preferential trade and aid pact - can export up to 775,000 tonnes of bananas annual to the EU duty free. Other exporters have to pay a tariff of €176 a tonne.

But earlier this year, a WTO dispute panel, on a complaint by Ecuador, ruled that the EU quota tariff was unfair and incompatible with its regime. It was at least the third time the WTO was ruling against the EU banana regime at the behest of Latin American producers.

Devastating

The challenges and the WTO decisions, Caricom has argued, have been devastating to its small economies, driving regional leaders at a summit in Antigua and Barbuda last week to raise the possibility of retaliation at WTO negotiations.

"Heads of government affirmed that if the outcome of the WTO Doha Development Agenda negotiations are to be balanced, there must be suitable treatment for bananas and other products that are subject of long-standing pre-ferences and that, if this were not to be the case, Caribbean countries would find it impossible to join in any consensus that may emerge in the current talks," said a com-muniqué from the summit.

Although they did not spell it out, it is believed that the Caricom leaders also had their eyes on protecting their markets for sugar and rice in the EU.

Under the economic partnership agreement, the proposed free-trade pact finalised last December between Caricom and the EU, Caribbean countries would be assured for tariff-free and quota-free exports for almost all their products to Europe.

But beyond the uncertainty over when the scheme will be put into full operation - in the face of scepticism over some terms by some critics - regional leaders worry that the Latin America producers, who are already the major suppliers of bananas to Europe, would wipe them out completely if the tariff was lowered significantly.

Indeed, the Caricom leaders pointed out that since Latin American and other exporters were granted quota-free access to the European market in 2006, their exports had increased by 10 per cent. In contrast, exports from the ACP have declined by nine per cent "and that almost every CARICOM exporter experienced declines".

Tariff reduction

Yet, the Latin Americans have "continued to call for substantial reduction in the EU's tariff, the only effect of which would be to severely damage the interest of Caribbean producers".

The CARICOM leaders complained of being left out of talks between the EU and the Latin American challenges to the banana regime, which they felt could be "devastating" for the economic interests of their countries.

Said the communiqué: "Heads of government also observed that in the WTO Doha negotiations, the same group of countries, claiming to be interested in the liberalisation of "tropical products", has as its main objective the elimination of the small share of the EU market available to banana producers in the African, Caribbean and Pacific countries."

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