Prices for bananas in the European Union could fall by 12 percent as the banana war… the world’s longest-running trade dispute… comes to an end.

In an agreement being hammered out in Geneva, the EU will cut import duties on Latin American bananas from $255.69 USD per ton to $165.61 USD per ton over the next seven years.

The EU is the largest banana market in the world with yearly imports of 5.5 million tons.

Latin American banana producers have been paying hefty tariffs for 16 years while producers in the Caribbean and Africa pay no tariff on their product in the EU. The intent was to give former European colonies in Africa, the Caribbean, and the Pacific (known as the ACP countries) a chance to grow their economies without the need for foreign aid.

Latin American banana producers complained immediately that the system was unfair, and the World Trade Organization declared the tariff on Latin American bananas illegal.

The end of the banana war is good news for the economies of Latin American producers, but it means tougher competition for ACP producers, so a compensation package worth more than $290 million USD for the ACP producers is included in the agreement.