U.S. CALLS EU BANANA TRADE PROPOSAL UNACCEPTABLE
USIA
USIS Washington File
22 January 1998
U.S. CALLS EU BANANA TRADE PROPOSAL UNACCEPTABLE
(EU proposal inconsistent with WTO agreements) (520)
By Jon Schaffer and Wendy Lubetkin
USIA Staff Writers
Geneva -- The United States says that proposed changes to the European
Union's (EU) banana import regime would continue to violate World
Trade Organization (WTO) rules and would result in an increase in
discrimination and protectionism.
"The United States is disappointed that the Commission proposes once
again to establish distinct and separate regimes for the two groups of
developing countries, one quota for the APC countries on the one hand
and a highly restrictive quota for the Latin Americans on the other,"
Ambassador Rita Hayes, U.S. permanent representative to the WTO, said
January 22.
Hayes held a press briefing following the January 22 meeting of the
WTO Dispute Settlement body.
As to EU contentions that their banana policy complies with the WTO,
Hayes responded: "Quite simply the United States says no way. It is
not."
Similar arguments were presented January 22 by the governments of
Honduras, Ecuador, Guatemala and Mexico, all which had joined the
United States in a WTO complaint that the EU policy provided
preferential treatment to certain countries.
In several WTO dispute panel and appellate rulings, the WTO found that
the EU's banana import system, by levying a lower duty for fruit from
several former colonies in Africa and the Caribbean (APC countries)
than on other countries, violated international trade rules stating
that all imports of a given product must be similarly restricted. The
panel ruled that the restrictions can reflect historical trade
patterns.
The latest EU proposal calls for an annual tariff rate quota of 2.2
million tons for Latin American banana suppliers and 857,000 tons for
ACP suppliers -- levels the U.S. contends would greatly restrict Latin
American access and would greatly exceed historical shipments from the
ACP countries, the U.S. says.
"The assignment of different tariff-rate quotas among discrete sets of
competitors creates dissimilar conditions of competition in the
market, violating the basic non-discrimination obligation of Article
13 (of the General Agreement on Tariffs and Trade)," the Office of the
U.S. Trade Representative said in a paper issued January 14.
"This is the first dispute in which the EC has undertaken to comply
with adopted WTO rulings against its measures. A proposal by the
Commission that in the first instance is so obviously WTO-inconsistent
and protectionist does not reflect well on the EC's commitment to the
multilateral trading system," the USTR paper said.
"I found it appalling that the EU's insistence on a WTO-inconsistent
alternative can only prolong it through further proceedings with the
dispute settlement body," Hayes said. She urged the EU Commission and
member states to reconsider the banana proposal.
Hayes also sharply criticized the EU for delaying actions requiring it
to comply with a WTO decision that found discriminatory EU bans on
U.S. beef grown with hormones.
"I will tell you emphatically that the United States expects and
intends for the EU to comply and to comply immediately," Hayes said.