EU banana rules to face another WTO challenge

European restrictions on banana imports will face a new challenge at the World Trade Organization next month when Ecuador asks the group to restart a decade-old dispute over what Latin American countries and the United States have previously argued amounts to unfair trade discrimination, officials said Monday.

Photo: EU banana rules to face another WTO challenge

The WTO has consistently ruled against how the European Union sets tariffs for bananas, forcing the bloc to overhaul a system that grants preferential conditions for producers from African and Caribbean countries, mainly former British and French colonies.

Latin American producers and banana companies based in the United States have long complained that the EU rules favor Caribbean and African producers. The United States, in 1999, and Ecuador a year later both won the right to impose trade sanctions on European goods after the WTO found the EU's rules to be illegal.

Brussels, however, says a new banana tariff established last year EUR176 (US$231) per ton has brought it into compliance with WTO rulings. Ecuador, the world's largest banana producer, asked the EU for consultations in November, and will ask for a formal investigation when the WTO's dispute settlement body meets on March 8, according to an advisory sent Monday to the organization's 150 members.

"As far as we are concerned, we have done what we needed to do," said Michael Mann, a spokesman for EU Agriculture Commissioner Mariann Fischer Boel.

Mann rejected Ecuador's claim, citing figures that the EU had imported more bananas last year from the South American country. "Any idea that they are kept out of the European market is just not true," he told The Associated Press.

Ecuador's mission to the WTO said it could not immediately comment.

Latin American bananas currently have around 60 percent of the market, while African and Caribbean producers have 20 percent, EU officials have said. Bananas grown in the EU mostly on Spanish and French islands account for another 20 percent, reports AP.

The case, originally brought to the Geneva-based trade referee in 1996, spawned a series of linked disputes in the WTO as lawyers wrangled over procedural intricacies and legislation which had previously never been tested.