Banana Woes

My apologies from this somewhat convoluted explaination; the article that spurred this whole banana war discovery can be found here.

With its main exports being petroleum, minerals, bananas and cut flowers, there is no question that Colombia is a developing nation. Consequently, Colombia was rather upset to find out the EU was implementing a banana tariff on imports, especially since Colombia exports 60% of its annual banana crop to the EU. Unfortunately, these banana difficulties are not new - this predicament has been going on between the EU and Colombia since the 1990's. In retaliation, Colombia and Ecuador have since filed a claim with the World Trade Organization (WTO) declaring the tariffs as devestating for their economies. In 2005, the EU's banana tariff system was pronounced illegal by the WTO. However, in late 2005, the EU presented a revised tariff system on bananas, still targeting Latin American countries.

Although there has still been no compromise, Colombia's government is providing aid to the suffering banana producers in the form of subsidies. While this aid comes as a breath of fresh air to Colombia, their relief is somewhat shortlived as the EU is also looking to import from Africa, where costs of banana production are cheaper, driving sales away from Colombia.