(Nov. 3) In a trade battle that stretches back more than a decade with Latin American banana-exporting countries, the European Union has lost another round.

The EU must go back to the drawing board to devise an acceptable banana import policy that is fair to Latin American exporters, the World Trade Organization ruled Oct. 27.

In what eventually could mean greater market access for Latin American bananas in Europe and greater market share for multinational banana marketers based in the U.S., a WTO arbitrator said the EU’s latest proposed solution falls short of WTO compliance.

Having been rebuffed by the WTO on Aug. 1 for a proposed tariff rate of 230 euros per metric ton on Latin American bananas, the EU proposed in mid-September a reduced tariff rate of 187 euros per metric ton (US $222 at Nov. 1 exchange rates) and a 775,000 metric ton tariff-free quota on imports of bananas from African, Caribbean and Pacific nations. Those countries — many with ties to EU countries, notably France — have smaller-scale producers who traditionally have received preferred market access compared to Latin American banana exporters.

However, the WTO said the proposed 187-euro tariff on Latin American bananas would fail to maintain market access for Latin America banana marketers.

The WTO did not rule on whether the EU would be permitted to retain a duty-free quota system for the smaller-scale African, Caribbean and Pacific countries. Quotas generally run counter to WTO-member trade obligations.

Mike Mitchell , director of corporate communications for Cincinnati-based Chiquita, welcomed the WTO decision.

“We have said for some time that we believe the tariff rate would need to be 75 euros (US $89.25) or less,” he said Oct. 31.

Europe’s current banana import policy allows Latin America banana marketers to ship 3.7 million metric tons of bananas at a tariff rate of 75 euros per metric ton.

However, any shipments that exceed that level are hit with tariffs of more than $1,000 per ton exceeding the quota. African, Caribbean and Pacific countries have a duty-free quota for 750,000 metric tons.

If the EU cannot find a way to lower the tariff rate to an acceptable level for the WTO arbitrator by Jan. 1 — the WTO’s deadline for Europe to move to a tariff-only system for Latin American imports — Mitchell said the EU and Latin American countries should agree to prolong the current banana regime rather than risk a trade war.