EU stoic after WTO rules against appeal on bananas - again

Nov 27, 2008, 12:59 GMT

Geneva - The European Union accepted the decision by the World Trade Organization's appeals body to once again rule against EU banana import rules, an EU official said Thursday, adding that full compliance however would likely only happen along with the finalization of the Doha Round of trade talks.

'If the ministers meet next month, we can solve the bananas,' said the official, requesting anonymity.

That amplified a statement made the night before by an EU trade spokesman following the WTO decision.

'The EU considers the Doha Round to be the right forum to find a resolution,' said Peter Power.

The WTO ruling given on Wednesday upheld an earlier decision by a lower body which found that the EU's duty-free tariff quota for African, Caribbean and Pacific (APC) countries did not comply with international trade rules.

The complaint against the Europeans was brought by Ecuador which, like other Latin American countries, doesn't enjoy the special privileges of the former colonies in APC, and pays taxes on its banana exports.

Ecuador is one of the leading banana exporters in the world.

The United States also filed a complaint. Though it does not directly export bananas to the EU, three US-based multinationals companies, Chiquita, Del Monte and Dole, have plantations in Central and South America.

US Trade Representative Susan Schwab called for Europe to 'implement a tariff-only regime' for the bananas.

A ministerial meeting in Geneva next month to continue the Doha Round, which started in 2001, still has not been called, and it will depend on whether countries can work out their differences enough to bring together the top-level representatives and reach a deal.

Meanwhile, the EU would continue to negotiate a deal on bananas with the Latin Americans 'and settle it once and for all,' said an official.

It remained unclear what sanctions might be used in the event that the EU did not comply with the ruling.

Pascal Lamy, the head of the WTO, has been pushing for a ministerial meeting.

Analysts have said a deal on trade would lead to capital injections into trade markets which would help alleviate some of the problems the global economy is currently facing, and prevent protectionism in a time of crisis.