WTO Backs US In Dispute With EU Over Banana Tariffs

by Ulrika Lomas, Tax-News.com, Brussels

02 December 2008

United States Trade Representative Susan Schwab has announced that the World Trade Organisation (WTO) Appellate Body has found against the European Union (EU) in the compliance proceeding brought by the United States against the EU’s banana import regime.

The United States brought this proceeding in June 2007 to challenge the EU’s import regime for bananas, which included a discriminatory tariff rate quota that allowed duty-free imports of bananas from only some countries.

On May 19, 2008, a WTO dispute settlement panel found in favour of the United States, a decision which the European Commission appealed. But on November 26, the Appellate Body issued its report and upheld all of the panel’s findings. The Appellate Body rejected all of the EU’s procedural claims alleging the United States was barred from bringing this proceeding and agreed with the panel that the EU’s duty-free tariff rate quota reserved only for some countries was inconsistent with Article XIII of the General Agreement on Tariffs and Trade (GATT) 1994.

“It is time for the EU to do the right thing and implement a tariff-only regime for bananas that meets the interests of all parties involved,” said Schwab.

The Appellate Body also found against the EU in the parallel proceeding brought by Ecuador.

The banana dispute is the longest running dispute in WTO history, stretching back as far as 1947 when two GATT panel rulings were blocked by the EU.

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