Banana tariff ruling causes dismay.

The latest World Trade Organization rejection of proposed European Union banana tariffs was greeted with dismay Friday by Caribbean nations fearful that they will be unable to compete with Latin American nations, reports AP (Oct. 28, 2005):

The 15-nation trade bloc known as Caricom said the lower European tariffs expected to emerge as a result of the ruling will be a "devastating blow" to the region's economy--specially when combined with planned EU cuts to sugar subsidies for Caribbean countries;

Dominica Trade Minister Charles Savarin called the WTO ruling "disastrous ... The ruling of the WTO panel must cause developing countries like Dominica to ask themselves whether trading relationships under the WTO can allow them to exist";

A WTO arbitration body backed a claim Thursday by Latin American countries--including Brazil and Colombia--that a reduced EU tariff of 187 euros (US$227) per ton violates global trade rules. The WTO ruled in August against an earlier EU proposal of 230 euros (US$278) per ton. Latin American officials, who have long complained that EU rules favor Caribbean and African producers, want the tariff reduced to euro75 (US$91) per ton;

The European Union said it was disappointed with the latest decision and would carefully study it before deciding how to proceed. Caricom said in a statement that Caribbean must modernize the regional banana industry to reduce the cost of production to compete in an era of free trade. "It is time for coming together of the industry as a regional bananas industry and not as individual member states," the regional bloc said.