One of the early signature cases of the WTO dispute settlement mechanism was over banana exports to the European Union (EU) by American firms like Chiquita operating in Latin American countries. The EU had long given preferential access to agricultural exports from former colonies in the Africa, Caribbean, and Pacific (ACP) grouping--including bananas. Meanwhile, tariffs were kept on similar exports from elsewhere such as Latin America. As the EU is the world's second-largest market for bananas, Latin countries dependent on banana exports were keen to have such trade barriers removed. In 2001, the WTO definitively ruled in favor of Ecuador against the EU. However, Ecuador again claims that the EU has been remiss in meeting its obligations. From Bloomberg:After half a dozen WTO rulings against the EU, the 27- nation bloc still imports bananas duty-free from former colonies in Africa and the Caribbean while applying a duty of 176 euros ($231) a metric ton to shipments from Latin America, including Ecuador, Costa Rica and Colombia. That practice continues the illegal discrimination against Latin producers, Ecuador says.While the EU thwarted today's request, under international trade rules, it can't block a second call for arbitration by Ecuador that may be made as early as March 20. Bananas are the world's fourth most-valuable food crop, after wheat, rice and corn, according to the United Nations...
Since January 2006, the EU's imposition of the 176-euro tariff has cost Ecuador $131 million in extra duties, said the Latin American nation. About 10 percent of Ecuador's population depends on the fruit for their livelihood, the government says.
Continued EU intransigence on this case is difficult to understand. Unless the EU wants to undermine the WTO's dispute settlement mechanism, it should go along and get it over with as it has been over ten years since the case was first brought to the attention of the WTO.
