US, ECUADOR RAISE BANANA DISPUTE WITH EU

8:03 AM Feb 7, 1996

US, ECUADOR RAISE BANANA DISPUTE WITH EU
Geneva 6 Feb (Chakravarthi Raghavan) -- The United States and Ecuador have now come up with a joint request for 'consultations' with the European Union over the Single Market Banana regime and the licensing procedures for the allocation of the tariff-quotas at zero duty to various countries and local distributors/importers.

The request for consultation is the first step in a complaint procedure for dispute settlement.

The US had previously already lodged a complaint.

But it has now come up with a joint one, with Ecuador, a major Latin American producer and exporter to the European Union.

The US sources explained that the new joint complaint was to enable both complaints to be processed and dealt with together before a single panel, and that the US earlier complaint would be withdrawn.

However, some trade officials suggest that something more than a technicality for two complaints being heard by the same panel is involved.

The US itself is not a producer and exporter from its territory of bananas to Europe, and its complaint really related to the interests of its banana trader, Chiquita transnational corporation, which has banana plantations in the central America, Caribbean and Latin American countries.

The US complaint, on behalf of Chiquitas (publicly identified as a heavy campaign funder to both Clinton and Bob Dole), was that the EU licensing procedures for the tariff quotas in the EU schedule under the Uruguay Round, discriminated against Chiquitas.

The EU has provided country quotas to those who negotiated the deal, and has enabled the countries to allocate their country-quotas to various exporters.

Some of them like Colombia and Costa Rica have done so by allotting licenses to their domestic firms with plantations and marketing the bananas. This has strengthened their domestic sectors and the strangle-hold of Chiquitas and other TNCs on the banana sector and market.

It is somewhat doubtful whether the US would have been able to claim an 'interest' in terms of one of its producers being denied its market or being treated in a discriminatory way, by the EU trade regime, in agitating the Chiquita case.

But coupled with Ecuador, which became a WTO member only after the WTO entry into force, it hopes to be able to pursue the case.

Apart from the issues of the EU's preferential web of agreements, the systemic issues should prove an interesting outcome in the panel dispute and ruling.