EU banana boost

Date: 21/12/00

By Craig Winneker

THE EU is planning to step up pressure on Washington to lift its sanctions in the long-running battle over bananas after farm ministers agreed a deal to revise the Union's import regime this week.

The new system would allocate quotas on a first-come, first-served basis until 2006, when a tariff-only scheme would take effect. The World Trade Organisation ruled last year that the Union's existing regime discriminated against US-backed Latin American producers in favour of former European colonies, mostly in the Caribbean.

EU and US leaders made "remarkable progress" on the issue at their summit in Washington earlier this week, according to European Commission President Romano Prodi, but were unable to clinch a deal.

Officials in the Clinton administration have refused to accept the first-come, first-served system. But EU diplomats say the incoming Bush team may be open to this solution because US banana giant Dole, which backs this approach, was a bigger contributor to Republican campaign funds than rival Chiquita, which opposes it.

This week's decision by farm ministers also paves the way for Trade Commissioner Pascal Lamy to put pressure on the US to declare what changes to the banana regime it is prepared to accept. He is also expected to demand that the US suspend its sanctions on €18 million of EU imports while negotiations continue.

There are, however, few signs of progress in the row over the EU ban on hormone-treated beef and Clinton warned that a new trade war could erupt over planned government funding for the Airbus superjumbo jet.

The EU is planning to step up pressure on Washington to lift its sanctions in the long-running battle over bananas after farm ministers agreed a deal to revise the Union's import regime this week.