WTO
PANEL RULES AGAINST EU BANANA TARIFF REGIME
A WTO dispute
panel ruled on 10 December that the EU has failed to bring its
banana import regime into compliance with former WTO rulings.
The battle over bananas between the EU and suppliers to which
it does not give preferential market access -- mainly in Latin
America -- is one of the most longstanding conflicts at the global
trade body.
In its latest
version, the conflict emerged when the EU failed to comply with
a pledge made in 2001 to replace its WTO-inconsistent system of
duties and quotas with a tariff-only regime for bananas by 1 January,
2006. Crucially, Brussels promised that the new regime would "at
least maintain total market access" for countries that did not
benefit from preferences.
Even after
the end-2005 deadline, however, Brussels introduced a 750,000
tonne zero-duty tariff quota for bananas from the African, Caribbean,
and Pacific (ACP) group of countries, along with a general 176
euro/tonne tariff for bananas from elsewhere, including Latin
America.
Ecuador, the
world's largest banana producer, claims that the EU's tariff regime
has decreased its market share in Europe, and hurt more than one
million Ecuadorean farmers and workers dependent on the banana
industry. Ecuadorean delegates at the WTO Mission in Geneva described
the most recent WTO ruling as "highly satisfactory," and said
that it "represents a step forward."
EU officials
said that the WTO panel took a rather "formalistic" approach,
overlooking data that they claimed demonstrated that European
imports of Latin American bananas were increasing.
The panel's
findings, contained in a confidential interim ruling, will be
released publicly in March 2008. Interim reports are rarely overturned
in final rulings, but the EU could, at that point, file a final
appeal.
If the EU
does not challenge the WTO ruling, which stated that the EU's
tariff regime for bananas is violating global trade rules, Ecuador
could retaliate by placing sanctions on EU exports. Up until now,
Ecuador has stated that the EU banana tariff has cost its banana
industry $131 million dollars.
Finally, other
countries in the Americas have also joined Ecuador's case. Panama
and Nicaragua participated as third parties to the dispute while
Colombia, Panama, and the US have recently initiated their own
complaints.
ICTSD reporting;
"United States requests WTO panel to review European Union's banana
import regime", Office of the USTR, 29 June 2007; "WTO ruling
on EU banana tariffs opens door to sanctions from Ecuador", International
Herald Tribune, 17 December 2007.
