Banana rules

The World Trade Organisation yesterday launched a US-requested panel to investigate whether the EU has upheld a prior verdict against its banana import rules.

The banana dispute dates back to the launch of the EU's single market in 1993, when Brussels adopted a complex system of quotas and tariffs that the US said created barriers to bananas from Latin America and marketed by US companies such as Chiquita.

The US won its WTO complaint on the banana regime in 1996, gaining the right to impose retaliatory duties on EU products. It stopped those duties after Brussels agreed to shift to a tariff-only import regime by January last year.

Washington alleges that Brussels' revised rules, which allow African, Caribbean and Pacific states - mainly ex-colonies of Britain, France and Portugal - to export a certain amount of bananas to the EU without paying tariffs, violate the WTO's 1996 ruling.

Bananas from Latin America and other countries do not have access to the European market under this duty-free tariff-rate quota and are subject to a €176 per tonne duty, the US told the WTO's Dispute Settlement Body yesterday.

The EU waived its right to block Washington's initial request for the WTO to set up a compliance panel in the case. It was not clear whether the US-requested board would be merged with another compliance panel into Brussels' banana regime that was initiated by Ecuador in March.

Compliance panels normally take about three months to issue a ruling, compared to six or nine months for rulings in regular WTO-brokered disputes. The Ecuadorian-requested panel had a late start because of delays in selecting panellists, meaning it is likely to release its preliminary verdict in October.