Trade: US, EC still talking over bananas

Geneva, 25 Jan (TWN) -- The meeting of the Dispute Settlement Body, set for Monday morning, was put off till afternoon as the US and EC were still talking on a way to prevent a trade fight over bananas (if the US seeks and automatically gets the right to retaliate and imposes sanctions).

On Friday, the WTO Director-General, Renato Ruggiero, made a compromise proposal to the two sides -- involving the US getting, but suspending the imposition of its sanctions, till the reconvened banana panel looks into whether the EC regime complies with the earlier rulings.

The US is reported to have said it could agree, provided simultaneously, the panel or an arbitrator looks into and decides on the extent of trade damage for which the US could impose retaliation, so as to avoid further delays.

On Friday, Saturday there were meetings involving Ruggiero, the US and EC ambassadors. These meetings were resumed Monday morning, and the DSB meeting was put off till afternoon.

On Friday it became known that Japan, India and a few others would move in the DSB that the DSB's consideration of the US inscribed agenda item for authorization of sanctions, would be "suspended" until after the reconvened banana panel completes its work and makes recommendations for adoption by the DSB. The resolution would also stipulate that the 30-day period, after the entry into force of the EC regime (for whose purported non-compliance with the ruling the US was to retaliate), will kick in from that time.

There were reports that the WTO legal division was advising the DSB chair that such a motion would be untenable.

In back-and-forth talks involving Washington, Brussels and Geneva, the EC is said to be willing to accept the Ruggiero formula, but is balking at the arbitration over the extent of damages, as this would imply that the EC's new regime is not in compliance, and the US has a right to retaliate on the basis of unilateral determination.

The Ruggiero formula is reported to be a variation.