ECUADOR ASKS FOR WTO DISPUTE PANEL TO EXAMINE EU'S BANANA IMPORT REGIME

The EU's banana import policies will once again face legal scrutiny at the WTO, after Ecuador formally requested the creation of a dispute panel to examine its claim that Brussels is failing to comply with past rulings.

Ecuador took the first step in WTO dispute settlement procedures last November, when it requested consultations with the EU on the issue (see BRIDGES Weekly, 22 November 2006). This followed almost a year of unsuccessful bilateral talks under the 'good offices' of Norwegian Foreign Minister Jonas Gahr Store.

The decade long spat has pitted the EU against several Latin American banana producers and the US, over Brussels' trade preferences for bananas from its former colonies in the African, Caribbean, and Pacific (ACP) group of countries.

After losing WTO cases in 1997 and 1999, the EU in November 2001 struck a deal with Ecuador and the US allowing it to maintain its preferences for ACP exports until the end of 2005. In return, Brussels promised to replace its system of duties and quotas for banana imports with a 'tariff-only regime' by 1 January 2006. This new import regime was supposed to "at least maintain total market access" for countries like Ecuador that did not benefit from preferences.

Following its failure to reach a negotiated solution, the EU unilaterally implemented a tariff of 176 euros per tonne, accompanied by a duty-free quota of 775,000 tonnes for ACP bananas (see BRIDGES Monthly Review, December 2006-January 2007). Ecuador claims that the new regime discriminates against non-ACP suppliers and fails to maintain its earlier levels of market access - and thus violates the earlier rulings.

EU spokesperson Michael Mann rejected Quito's claims as "just not true," saying that that EU banana imports from Ecuador rose last year.

Despite the request for the creation of a panel, both parties expressed a continued interest in working towards a negotiated solution.

WTO Members will address Ecuador's request on 8 March. The EU can block the first request for the creation of a panel, but cannot do so a second time.

Ecuador's panel request (WT/DS27/80) is available at http://docsonline.wto.org.

ICTSD reporting; "European Union Banana Rules to Face Another WTO Challenge," CANADIAN PRESS, 26 February 2007.