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EU requests second WTO arbitration, banana imports

EU requests second WTO arbitration on its revised proposal for the banana import regime

The EU today submitted a request for a second arbitration on its proposal for a new import tariff for bananas from countries benefiting from Most Favoured Nation status. The Commission has carefully analyzed the award from the first arbitration. It is confident that its revised proposal for an import duty of € 187/tonne for MFN suppliers and a tariff quota of 775,000 tonnes at zero duty for bananas originating in ACP countries maintains market access for MFN suppliers and an equivalent level of preference for ACP suppliers as the current regime. The intention remains to have a tariff only system in place on 1 January 2006.

Mariann Fischer Boel, EU Commissioner for Agriculture and Rural Development, said: “The EU has carefully analyzed the arbitration award, revised its proposal accordingly, and initiated consultations with our Latin American and ACP partners on this basis. Despite our efforts, we were not able to come to an agreement with our partners. Nor did they present an alternative proposal of their own. Time is now running out for the introduction of the tariff only regime by the beginning of next year. This is why we are requesting a second round of arbitration today. I still hope we can find a solution to this long-running dispute which will be acceptable to everyone.”

Peter Mandelson, the EU’s Trade Commissioner, said “We now need to bring an end to this dispute. For too many years it has poisoned relations between the developing countries that sell bananas to Europe. The EU is faithfully following the roadmap agreed at Doha in 2001. We are confident that the WTO arbitrators will recognise this."

In order to put an end to the long-standing banana dispute, the EU agreed with Ecuador and the United States in 2001 to move from a complex import system based on a combination of tariffs and quotas for MFN bananas to a regime solely based on a tariff by 1 January 2006.

The current arbitration was established after a request of Brazil, Colombia, Costa Rica, Ecuador and Guatemala, Honduras, Nicaragua and Panama and Venezuela. The arbitration award issued on 1.8.2005 found that the proposed tariff of €230/tonne would not result in at least maintaining total market access for MFN banana suppliers.

On 12.9.2005 the EU presented a revised proposal in the light of the arbitrator’s award for an import duty of € 187/tonne for MFN suppliers and a tariff quota of 775,000 tonnes at zero duty for bananas originating in ACP countries. The revised proposal at least maintains total market access for MFN suppliers and an equivalent level of preference for ACP bananas.

The Commission had three rounds of consultations with the interested parties on 5.8.2005, 16.9.2005 and on 21.9.2005. The Commission also held consultations with the interested ACP countries on 4.8.2005 and 12.9.2005.

The same arbitrator will now be asked to determine, within 30 days of the new arbitration request, whether the EU has rectified the matter. The arbitration procedure must be completed in time for the entry into force of the new regime on 1.1.2006.

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