FOREIGN AGRICULTURAL SERVICE
U.S. MISSION TO THE EUROPEAN UNION

 Last update: July 19, 2007

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In April 2001, the United States, together with Ecuador, reached an agreement with the EU  to resolve a long-standing dispute over EU rules for banana imports. The agreement  provided for a transition to a tariff-only import system by January 1, 2006.  

On November 29, 2005, the EU adopted Council Regulation 1964/2005 setting the import  tariff for bananas from MFN countries at 176 EUR per MT. The new import regime, which includes a duty-free annual import quota of 775,000 MT for ACP bananas, is effective as of  January 1, 2006.  

Two earlier proposals from the Commission were rejected after a WTO arbitrator found that  the proposed tariffs (230 EUR/MT and 187 EUR/MT respectively) did not offer fair market  access to Latin American banana producers. Latin American suppliers were pushing for a  tariff of 75 EUR/MT, which was the in-quota tariff before coming into force the current  regime, and to end the zero-duty quota for ACP countries.

The new tariff of 176 EUR/MT is  not significantly lower than the earlier proposals.  On November 30, 2005, Honduras, Nicaragua and Panama requested consultations with the  European Communities under Article 21.5 of the Dispute Settlement Understanding (DSU).  These petitioners argue that the new EC bananas import regime is inconsistent with the recommendations and rulings of the DSB in the EC-Bananas III case (DS27- Panel and AB  reports adopted in 1997), the Doha Waiver on the Cotonou Agreement adopted in 2001, the  two arbitration awards issued in 2005 pursuant to that waiver, and Article XXVIII of the  GATT.

- U.S. requests WTO Panel to review EU banana import regime (USTR website - June 29, 2007)

 Reports 

- New EU banana regime (GAIN report E47019 -March 2007)

- Second WTO rejection in the banana dispute (GAIN report E35210 – November 2005)

- WTO rejects banana tariff (GAIN report E35157 – August 2005)

- European Commission proposed new tariffs for bananas (GAIN report E35036 – February 2005)

 Links

- Banana Regime (U.S. Mission to the EU - Public Affairs)

For more information on the Common Market Organization for Bananas see Horticultural Products: Bananas