April 8, 1999

Latin Americans hail WTO banana ruling

                  PANAMA CITY (Reuters) -- Latin America's major banana producers
                  hailed the World Trade Organization's ruling on Wednesday against
                  European Union banana import policies as a victory for free trade that
                  ends decades of discrimination.

                  In a case brought by the United States and five Latin American nations,
                  a panel of World Trade Organisation (WTO) experts ruled that the European
                  Union's (EU) new regime for the import and marketing of bananas violated
                  global trading rules and would have to be changed, diplomats and trade sources said.

                  "This is a sanction against the European Union for thinking it could mock
                  global trade laws," Enrique Gomez, president of the private National Banana
                  Producers Corporation of Ecuador, told Reuters.

                  Ecuador, the world's largest exporter, ships 16 percent of its production to
                  the EU -- between 650,000 and 700,000 tons each year. Its total banana
                  exports in 1998 brought in $1.05 billion, with exports to Europe worth $328

                  In smaller banana producer Panama, which controls roughly 15 percent of
                  Latin America's banana exports to the EU, officials were also jubilant.

                  "Yesterday's judgment is a great triumph for the WTO ... which had to
                  put up with the interminable delaying tactics used by the EEC which pushed
                  the system to the verge of a terrible crisis," said Deputy Foreign
                  Commerce Minister Laura Flores.

                   "The final result should be the adaptation, once and for all, of EU
                   legislation to ensure a just and non-discriminatory treatment for our
                  bananas," added Panamanian Foreign Commerce Minister Raul Hernandez
                  at a joint news conference.

                  The decade-old "banana wars" pitted the United States and five Latin
                  American countries -- Ecuador, Mexico, Guatemala, Panama and Honduras
                  -- against the 15-nation EU.

                  The United States and Latin America argued the new regime, which took
                  effect in January and includes import quotas, violated earlier WTO
                  decisions. They said it favours former European colonies in the Caribbean
                  over Latin American producers, and gave preference to European
                  distributors over U.S. companies.

                  "This is a victory for all the countries that believe in free trade," Marithza de
                  Vielman, a legal adviser for the Guatemalan Association of Banana
                  Producers, told Reuters.

                  De Vielman said the ruling would bolster Guatemala's banana export
                  industry, the country's third-largest with $190.4 million in 1998 exports. The
                  industry has been crippled by the European Union's unfair trade policies, she

                  Costa Rican officials were more cautious as they emerged from an
                  emergency meeting on the ruling, saying they would await the EU's response.

                  Last year Costa Rica produced a record 2.1 million tons of bananas,
                  representing $664 million in exports, industry officials said. That made it the
                  Central American nation's second largest industry after tourism.

                  The producers predicted the ruling would lead to increased exports. But the
                  benefits will not be felt overnight.

                  Central American producers are still recovering from last year's devastating
                  Hurricane Mitch and other blows to agriculture, while industry growth
                  depends largely on international fruit companies' aims.

                  Honduran agriculture officials predict this year's exports will reach a mere
                  54,500 tons, compared to 509,000 tonnes in 1998, due to Mitch's damage.
                  Panama suffered a 23.8 percent drop in banana exports last year due to a
                  two-month labour strike and severe drought.

                  One of the region's smallest producers, Nicaragua may have less to
                  celebrate because the WTO ruling could eliminate quotas that guarantee it a
                  small share of the European market.