(CN) - Ambassadors from the European Union and Latin American countries agreed to end the "longest trade dispute in history" over banana imports at a World Trade Organization meeting Tuesday.
As part of the agreement, the EU will gradually cut its import tariff on Latin American bananas from ¬ 176 per tonne to ¬ 114. In return, the Latin American countries will not request further cuts and will drop pending legal disputes against the EU.
Development and Humanitarian Aid Commissioner Karel De Gucht called the agreement "the best possible deal we could achieve" and noted that it "reconciles all parties' legitimate interests."
Ambassadors see the agreement as an important boost to the WTO's current Doha Development Rounds of current global trade talks, which seek to lower trade barriers in order to allow for freer markets.
"I am delighted that we have finally found a way to solve the bananas dispute with a compromise that works for all sides," said European Commission President José Manuel Barroso. "This is an important boost for the multilateral system."
Tuesday's agreement also promises not to cut the banana tariff in African, Caribbean and Pacific (ACP) countries, and will allow those countries several years to adapt to Latin American competition. Additionally, the European Commission is considering granting ACP countries ¬ 200 million for adaptation purposes.
As a parallel to Tuesday's deal, countries in the EU, ACP and Latin America agreed to stiffer future tariff cuts on "tropical products." Tariff cuts for "preference erosion" products will occur over a longer period.
"This dispute on bananas has soured global trade relations for too long," said Agriculture and Rural Development Commissioner Mariann Fischer Boel. She called the deal regarding tropical and preference erosion products "well-balanced" and "a really positive signal for the [Doha] Round as a whole."
Before the deal can go through, the European Parliament must approve it in accordance with the Lisbon Treaty. The Latin American countries will also sign a settlement agreement with the United States.
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