By Jeremy Smith
BRUSSELS, Dec 5 (Reuters) - European Union negotiators are looking to a tentative meeting of world trade ministers to secure a tariff-cutting deal with Latin America on bananas that may put an end, finally, to years of lawsuits and recrimination.
Since the 1990s, banana suppliers in Latin America, countries including Colombia, Panama, Costa Rica and the top world exporter Ecuador, have complained loudly over their access to Europe's fruit consumers: a huge and lucrative export market.
Although they enjoy by far the largest share of that market, the Latin Americans complain that for too long, EU import duties are set much too high and that Europe has always favoured suppliers from its former colonies in Africa and the Caribbean.
Last July, at a meeting of the World Trade Organisation (WTO) in Geneva, the two sides came tantalisingly close to a deal on the sidelines of talks about the Doha Round, intended to slash worldwide tariffs and subsidies on farm products.
Brussels then created diplomatic friction when it walked away from signing the agreement, saying its offer depended on success in the wider talks. That caused Ecuador and the United States to press on with WTO litigation.
Another WTO ministerial meeting, again in Geneva, may be called within a couple of weeks, possibly for Dec. 13-15, to try and secure a breakthrough in the seven-year Doha Round with a framework deal known as the "modalities" in WTO jargon.
The European Commission, the EU's executive arm that negotiates foreign trade for the bloc's 27 countries, says it is ready to take up the banana negotiations where they were left in July. Its tariff starting point, however, may not be so clear.
"We were almost home and dry in July," one Commission official said. "But it's been five months since then, so people might not want to start again on that basis."
"We will start from whatever basis we can, not necessarily what was on the table before," he said. "We want a negotiated settlement with all parties to deal with this once and for all. And we accept that means a lower tariff."
TRADE PERKS
Under its July deal, the EU would have cut its banana import tariff of 176 euros ($222.1) per tonne to 114 euros by 2016, with an initial cut next year to 148 euros.
That angered rival exporters from former European colonies in the ACP group of countries whose bananas enter the EU with no duties as part of their long-standing trade perks with the bloc. African producers, like Cameroon, were particularly annoyed.
European banana producers are worried about a prospective EU-Latin deal since a large share of the EU market -- about 80 percent -- is already dominated by Latin American suppliers and they do not want to see more cheap Latin fruit entering Europe.
A potential EU tariff reduction, they say, risks putting banana-producing countries that do not grow more than, say, 100,000 tonnes of the fruit a year -- the minimum capacity for running a viable shipping operation -- out of business for good.
The single-rate, 176-euro EU tariff was the WTO agreement struck to end the 1990s "banana wars" which Europe lost to the United States and Ecuador. It replaces a complex system of quotas and duties and has been in force since January 2006.
The Commission insists that any banana deal must be wrapped into a wider Doha agreement but still be separate; in the sense that bananas would be subject to specific tariff cuts, not those to apply to other tropical farm goods -- which would be deeper.
But that depends on what kind of Doha agreement is eventually struck, or not, industry officials say.
"The question is whether it's a deal that is one step down from modalities (framework agreement), which might not include bananas. It may end up being a patchwork deal," one said.
The Commission risks a good deal of Latin American wrath if it fails to pursue the deal that so nearly got signed in July.
"Ecuador is entitled to immediate, major reductions in the EU's WTO tariff rate no less than the cuts already promised by the EU to Ecuador this past July," Eduardo Ledesma, executive director of the Association of Ecuadorean Banana Exporters, said in a statement last month.
"If it requires sanctions and further challenges to achieve that result, then that is what we must do," he said.
In the past, countries like Ecuador and Panama have not shied away from legal action against Brussels, and usually enjoy the tacit -- sometimes active -- backing of the United States.
"The United States, as ever, is being quiet but is probably using this as a pawn over cotton, where they're on the political back foot," the industry official said.
While the U.S. does not export bananas to Europe, three of the world's biggest distributors with Latin American plantations are U.S. multinationals: Chiquita Brands International, Del Monte Foods Co and Dole Food Co. (Editing by Sue Thomas)