INDEPENDENT NEWS

Cablegate: Ecuador Requests Usg Action On Wto Eu Banana

Published: Fri 28 Oct 2005 08:45 PM
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 02 QUITO 002464
SIPDIS
USEU BRUSSELS PASS TO NORVILLE FRANCIS
USTR PASS TO CHRIS WILSON
USDA/FAS/OA/TERPSTRA/ROBERTS/HARDYBASS
USDA/FAS/ITP/SHEIKH/YOUNG/BERTSCH
USTR/MOWERY/MURPHY
SENSITIVE
E.O. 12958: N/A
TAGS: EAGR ETRD AORC PGOV PREL EC
SUBJECT: ECUADOR REQUESTS USG ACTION ON WTO EU BANANA
DECISION
1. (SBU) Summary: The GOE and Ecuadorian businessmen are
urging the USG to press the EU to abide by WTO decisions
regarding EU banana tariffs and quotas. During an October
25 meeting with the Ambassador, GOE Minister of Trade Jorge
Illingworth requested that the USG urge the EU to abide by
the 2001 WTO-driven agreement calling for a change in the
EU's banana import system. Meanwhile, banana producers met
with AgAtt and Econoff on October 27 to appeal to the US to
make a public announcement that the EU should move to a
tariff only banana import regime and not maintain their
current mixed tariff-quota regime. These appeals for US
support coincide with an October 27 WTO ruling favoring
Latin American banana exporters. End Summary.
ECUADOR REQUESTS SUPPORT
------------------------
2. (SBU) While discussing FTA issues with the Ambassador on
October 25, Minister of Trade Illingworth urged the USG to
press the EU to abide by a 2001 WTO ruling that called for
the preservation of market access into the EU for Latin
American banana suppliers. Given the USG's history in the
case -- the 2001 dispute was initiated by the US on behalf
of US companies operating on Latin America -- Illingworth
would like the US to get involved again. The Ambassador
assured Illingworth that his request would be passed on to
the Department.
3. (U) The leaders of five Ecuadorian banana producing
organizations who met with AgAtt and Econoff on October 27
were quite specific in what they wanted from the US: a
public pronouncement that the EU abide by WTO decisions and
move to a tariff-only regime. The five banana producers,
fresh off their own meeting with Illingworth, stressed the
positive social impact that EU compliance with WTO decisions
would have in Ecuador.
4. (U) Referring to the October 27 WTO ruling striking down
an EU proposal to move to a single tariff system set at 187
Euros per ton for Latin American bananas, the banana
producers were concerned that a new agreement to replace the
existing tariff-quota regime would not be reached prior to
January 1, 2006. Acknowledging the necessity of maintaining
some protection for ACP countries, the banana producers
remarked that they would be willing to accept a tariff of
125 Euros per ton that would fall to 75 Euros per ton over
several years. They also noted that during recent meetings,
EU representatives in Ecuador had shown no flexibility on
the level of the tariff. They are concerned that without a
new agreement, the EU will just continue with its mixed
tariff-quota regime until EU waivers for ACP support end in
2008.
5. (U) While recognizing past US involvement in the case,
AgAtt emphasized that Latin American countries and the EU
need to reach a new agreement and that the US was not a
formal player in this stage of the negotiations. AgAtt
underscored the importance of Latin American countries
having a common position. The AgAtt also stressed the US
position that the new agreement needs to comply with the
2001 WTO decision. In light of the favorable WTO ruling on
October 27, she encouraged the banana producers to return to
EU representatives and to get the GOE to vocalize its
position publicly. She also stressed the importance of
coming to an agreement prior to the next stage of the Doha
round of talks that will take place in Hong Kong in
December. AgAtt also stated that she would communicate
their concerns and requests to counterparts in Washington,
DC.
ECUADOR REMAINS DIVIDED INTERNALLY
----------------------------------
6. (SBU) Although they at times claimed that the Ecuadorian
banana sector's 6,000 producers were united in this fight,
the banana producers meeting with AgAtt and Econoff also
acknowledged that banana magnate Alvarao Noboa's interests
are keeping the GOE from taking a public stand on the issue.
Noboa's banana plantations are tied to Chiquita, while those
of other banana producers are associated with Dole and Del
Monte. Because Chiquita maintains EU concessions for banana
imports into the EU, it benefits from the status quo.
Noboa's political power in Ecuador (he is the leader of a
major political party, the PRIAN) essentially keeps the GOE
from publicly proclaiming its support for a new tariff-only
system. The banana producers told AgAtt and Econoff that
Noboa is applying pressure on Ecuadorian congressmen to keep
the GOE divided.
JEWELL
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