WTO Panel Again Rules Against EC's Banana Import Regime
A World Trade Organization dispute settlement panel (DSP) has again found that the European Community's banana importing regime, in particular its preferential tariff quota reserved for African, Caribbean, and Pacific (ACP) countries, is inconsistent with certain Articles of the General Agreement on Tariffs and Trade.1
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
The subject of the current DSP ruling in this long-standing dispute was whether the banana importing regime the European Union introduced in 2006 in response to the U.S.-EU Understanding on Bananas was consistent with the EU's GATT/WTO obligations.
(Note that the U.S. does not export bananas to the EU itself, but three of the largest producers with plantations in Latin America are U.S.-based multinationals (Chiquita, Del Monte, and Dole).
Ruling Marks 11th Time EU Banana Regime Found to be WTO-Inconsistent
The Office of the U.S. Trade Representative (USTR) states that this is the eleventh time the EU's banana importing regime has been found inconsistent with its GATT/WTO obligations, making it the longest running dispute in WTO history.
1In addition, the DSP found: (1) that the preference granted by the EC to an annual duty-free tariff quota of 775,000 mt of imported bananas originating in ACP countries is inconsistent with the GATT and (2) that the EC failed to demonstrate the existence of a waiver from Article I.1 of the GATT to cover the preference granted.
(See ITT's Online Archives or 09/17/07 news, 07091725, for BP summary of the USTR seeking comments on this dispute, including a short dispute history.)
WTO press release, with link to the DSP report (dated 05/19/08) available at http://www.wto.org/english/news_e/news08_e/27rw_e.htm
WTO summary of the dispute, "European Communities - Regime for the Importation, Sale and Distribution of Bananas" (DS27) available at http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds27_e.htm
USTR press release (dated 05/19/08) available at http://www.ustr.gov/assets/Document_Library/Press_Releases/2008/May/asset_upload_file107_14908.pdf
BP Note
According to a press source the EU plans to appeal this DSP's ruling. After the appeals process is complete and if the EC is still determined to have GATT/WTO-inconsistent measures, WTO provisions set out rules for compensation or the suspension of concessions if the offending party does not bring its inconsistent measures into conformity. In principle, concessions should be suspended in the same sector as that in issue in the panel case.
(See ITT's Online Archives or 01/30/08 news, 08013015, for BP summary of the signing of these agreements.)
EU Business (dated 05/20/08) available at http://www.eubusiness.com/news-eu/1211281322.66/