U.S. and EU Sign Agreement in Banana Dispute
The U.S. Trade Representative announced that on June 8, 2010, the U.S. and the European Union signed an agreement designed to lead to settlement of the longstanding dispute brought by certain Latin American countries and the U.S. over the EU's bananas trading regime.
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(Note that the U.S. does not produce bananas for export to the EU, but three of the largest banana producers with plantations in Latin America are U.S.-based multinationals -- Chiquita, Del Monte, and Dole.)
EU Will Not Reintroduce Discriminatory Measures, Only Use Tariffs
In the agreement, the EU agrees not to reintroduce measures that discriminate among bananas distributors based on the ownership or control of the distributors or the source of the bananas, and to maintain a non-discriminatory, tariff-only regime for the importation of bananas. The text of the agreement was initialed on December 15, 2009.
Complements Previous Agreement Requiring Staged Tariff Cuts for Bananas
The U.S.-EU agreement complements the Geneva Agreement on Trade in Bananas (GATB) between the EU and several Latin American banana-supplying countries, which was also initialed on December 15, 2009 and recently signed.
The GATB provides for staged EU tariff cuts to bring the EU into compliance with its World Trade Organization obligations. With the signing of the GATB, the EU will make its first tariff cut, retroactive to the date of initialing.
USTR states that together, these agreements will enhance non-discriminatory market access opportunities in the $4 billion EU market for imported bananas to the benefit of U.S. distribution companies and their workers.
Final Resolution Still Pending WTO Certification, Settlement of Claims, Etc.
According to USTR Kirk, the signing of the two agreements is a continuation of a process began in December and once completed, will culminate in the settling of the various banana trade disputes and claims against the EU at the WTO.
He explained that the EU still needs to request formal WTO certification of its new tariffs on bananas, upon entry into agreement with the Latin American countries (after the various parties conclude their domestic ratification procedures). In addition, the GATB provides that once the certification process is concluded, the EU and the Latin American signatories to the GATB will settle their disputes and claims. Once that has occurred, the U.S. will also settle its dispute with the EU.
(See ITT’s Online Archives or 12/16/09 news, 09121605, for BP summary of the EU, Latin America, and the U.S. reaching agreement on settling the banana dispute.)