By Jeremy Smith
BRUSSELS, March 13 (Reuters) - Latin America would have to sign a definitive deal with Europe to cut banana import duties and pledge to end lawsuits if the world's longest-running trade row is to be wrapped up, Europe's farm chief said on Friday.
EU regulators have been negotiating with Latin America's leading banana suppliers towards an agreement that would gradually reduce import tariffs through to 2016 and put an end to the "banana wars" that have dragged on since the 1990s.
During that time, Latin American countries filed a string of cases against the EU's executive Commission at the World Trade Organisation (WTO) for an entry tariff it says is discriminatory and set far too high. Europe has always lost those cases.
Ecuador, the world's largest banana exporter, has led pressure from Latin America for the EU to stick to a deal negotiated in July 2008 on the sidelines of a Geneva meeting of ministers seeking a breakthrough in the WTO's Doha round.
That deal fell apart as the WTO talks collapsed.
"If we can find the right balance, and that is of course the condition, I would be in favour of trying to find a solution. But certainly not under any circumstances," EU Agriculture Commissioner Mariann Fischer Boel said in an interview.
"It could be desirable to end this ongoing discussion."
As part of an eventual deal, Latin American countries would have to agree to drop all lawsuits over banana tariffs, she said. And all tariff reductions would be fixed, with no chance of additional cuts folded into any wider Doha agreement. "It's obvious that if we make a standalone (agreement), you cannot expect the Community to pay twice ... and then it has to be transferred into the discussions on Doha, but with this fixed landing zone. We don't pay twice," Fischer Boel said.
Latin America's banana production is dominated by three of the world's largest fruit distributors with plantations in the region: Chiquita Brands International, Del Monte Foods Co and Dole Food Co.
COMPENSATION
Europe's latest offer under discussion would initially cut banana duties, as early as possible, to 148 euros ($190.50) per tonne from 176 euros now and then to 136 euros by 2011.
The idea is to cut the duty to 114 euros by 2016, but the means of getting there is, for the Commission, largely dependent on a Doha agreement. One scenario, it has suggested, could be to 'freeze' remaining annual cuts if there is no Doha deal by 2012.
Latin America is not the only player in the EU banana saga.
Brussels is trying to find a financial aid package for banana producers in the African, Caribbean and Pacific group to compensate them for any losses due to tariff cuts. Europe's own producers in the French Caribbean and Spanish Canary Islands are also seeking some form of financial support.
As part of an internal banana reform in 2007, those producers won generous EU handouts, woven into special development programmes for the bloc's 'outermost' regions -- Martinique, Guadeloupe and the Canary Islands, among others.
Those programmes are up for review next year.
"They had a generous agreement in 2007 but we will have to look at the consequences of an agreement on lower tariffs for the Latins," Fischer Boel said.
"But I don't sit here and write a blank cheque to the European banana producers," she said. (Editing by Peter Blackburn)