Developing countries and the WTO • Volume 12 • Number 28 • 4th September 2008

EU Appeals Ruling on Banana Import Regime

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The EU filed an appeal on 28 August in an attempt to overturn a WTO ruling that its import tariffs on bananas discriminate against Latin American countries. In its appeal, Brussels argues that the panel “completely disregarded” evidence showing that Latin American banana suppliers’ access to the European market has risen by more than 10 percent. The EU also had “significant systemic concerns” about judges’ interpretation and application of relevant WTO provisions, according to an official statement.

The WTO has consistently ruled against Brussels’ banana tariff regime, forcing it to overhaul a system that has long granted preferential conditions to producers from ACP states — 79 former colonies, mainly British and French, located in Africa, the Caribbean, and the Pacific. This arrangement is particularly disliked by Latin American banana exporters, who claim that the EU’s treatment of ACP bananas is unfairly discriminatory.

On the sidelines of the negotiations at the Doha mini-ministerial held in Geneva in July, the EU tried to stave off such protests by striking a deal with 11 Latin American nations. Under the terms of that agreement, Brussels would cut its banana imports from €176 per tonne to €114 per tonne by 2016, with an interim cut to €148 by January of next year.

In exchange for easier access to the EU banana market, the Latin American nations would agree not to challenge the EU’s duty-free access to banana imports from ACP countries. In addition, the Latin American governments would drop existing lawsuits against the EU, and agree not to launch more challenges.

But given the collapse of the mini-ministerial talks, the fate of that deal is now in question. The EU maintains the agreement was dependent on the WTO Members reaching a breakthrough on agriculture and industrial tariffs, while Ecuador insists that the banana deal struck in July is a stand alone agreement.

Latin American banana producers have expressed “extreme disappointment” with the EU’s decision to reject the accord. Indeed, Ecuador, the world’s largest banana exporter, and the US have vowed to move forward with WTO litigation against the EU’s banana tariff regime.

The WTO’s Appellate Body - its highest court - will issue a verdict within 90 days as to whether Brussels will have to comply with the WTO panel reports.

ICTSD reporting; “EU to appeal WTO banana ruling,” THE LATIN AMERICANIST, 28 August, 2008; “EU appeals against WTO banana rulings,” EU BUSINESS, 29 August , 2008; “WTO rules for U.S. against EU banana tariffs,” ASSOCIATED PRESS, 2 August, 2008; “EU Files Appeal Against WTO Ruling On Compliance With Banana Import Tariffs,” WTO REPORTER, 1 September, 2008; “Ecuador hits back at EU for discarding banana deal,” NORTH AMERICAN NEWS, 29 August 2008.