No end in sight to bitter battle over bananas

Date: 17/12/1998

By Simon Taylor

THE increasingly bitter transatlantic dispute over the EU's banana regime is set to drag on into next year despite Washington's decision to delay publication of a list of Union exports which could be hit with sanctions.

The definitive list was due to be published earlier this week, but US trade officials said they were still consulting American industry.

The decision to postpone its publication until next week will at least prevent the banana dispute from dominating tomorrow's (18 December) EU-US summit in Washington at which President Bill Clinton, European Commission President Jacques Santer and Austrian Chancellor Viktor Klima will discuss a range of bilateral trade and political issues.

But it is nevertheless likely to sour the atmosphere. The US reacted angrily this week to a bid by the Union to get a team of World Trade Organisation experts to rule on whether the EU's revised banana import regime meets the WTO rules.

“We are not prepared to consider a panel if we are yet again going to be subjected to European Communities procedural conditions,” said US ambassador to the WTO Rita Hayes.

Trade experts in Geneva said the five countries which are challenging the Union's regime could not accept the EU's call for the reconvened panel to be given a specific mandate to establish that the system was in line with WTO rules.

They added that there was no provision in the organisation's rules for defining a panel's mandate in such a narrow way, with one comparing it to a man walking into a court of law and asking a judge to declare him innocent unless he is actually proved otherwise.

The US still insists that it will be entitled to go ahead with sanctions on 3 March if the WTO supports its view that the import arrangements continue to discriminate against bananas produced in Latin American countries.

But Trade Commissioner Sir Leon Brittan insisted again this week that the new regime complied with WTO rules and that the US was undermining the trade body's multilateral framework for settling disputes by drawing up a list of sanctions before it had given its view.