April 6, 1999

U.S. wins banana ruling

                           Washington gets go-ahead to impose
                           100% tariffs on $200M of EU imports
                  WASHINGTON (Reuters) - The United States on
                  Tuesday called the World Trade Organization's
                  decision on European Union banana import rules a
                  major victory that could set a precedent in other trade
                  disputes, including the EU ban on hormone-treated
                     U.S. trade officials said a WTO arbitration panel
                  agreed with the United States that new EU banana
                  import rules violate international trade laws. But the
                  panel significantly lowered the amount of sanctions
                  sought by Washington in the case.
                     U.S. Trade Representative special negotiator Peter
                  Scher said the WTO decision clears the way for the
                  United States to impose 100 percent tariffs on $191.4
                  million worth of imports from the European Union. The
                  United States originally claimed $520 million in lost
                  trade due to EU banana rules.
                     "We view this as a major victory for the WTO
                  dispute settlement system," Scher said in a telephone
                  conference with reporters. "This demonstrates that
                  there are time limits that must be respected and if
                  countries don't come into compliance at the end of a
                  reasonable time period, then they have to pay the
                     The United States had charged the EU rules, which
                  took effect in January, failed to comply with earlier
                  WTO decisions against EU banana import regulations,
                  and that EU policies favored former European colonies
                  in the Caribbean over Latin American producers, and
                  European distributors over U.S. companies.
                     Scher said the latest WTO decision also sets
                  important precedents for other agriculture trade
                  disputes with the European Union, particularly a ruling
                  against an EU ban on U.S. beef treated with growth
                  hormones. He said it also would set an important
                  precedent in a separate dispute with Canada over
                     "I think it has a very clear message for beef
                  hormones and a very clearly message for Canada
                  magazines and other countries and that is that the
                  WTO dispute settlement system has teeth," Scher said.
                     In a statement, U.S. Trade Representative Charlene
                  Barshefsky said she hoped the EU would change its
                  banana import regime to make it WTO consistent
                  rather than accept the 100 percent import duties.
                     "As before, we are prepared to work with the EU
                  on a new banana regime that meets the requirements of
                  the WTO and allows banana producing countries in
                  the Caribbean to continue to export bananas,"
                  Barshefsky said.
                     Scher said the U.S. Trade Representative's Office
                  would publish in the next few days a list of goods that
                  will be subject to the 100 percent tariffs, which will be
                  effective retroactively to March 3. Those goods will be
                  taken from a list -- ranging from Scottish cashmere
                  sweaters to Italian pecorino cheese -- published earlier
                  in the dispute.