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Colombia initiates new WTO complaint against EU banana tariff, escalating dispute
POSTED: 10:52 a.m. EDT, March 26,2007

GENEVA_Colombia has brought a new complaint against the European Union's import rules for bananas, officials said Thursday, a sign that one of the World Trade Organization's longest-running disputes is spreading.

Colombia made the move late Wednesday, a day after Ecuador asked the global trade body to examine whether Brussels' banana tariffs comply with WTO rulings, trade officials said.

The spat, which dates back to 1996, has previously involved the United States and other Latin American countries. While they have voiced support for Ecuador's position, Colombia is the first country to join the dispute or launch its own proceedings against the bloc.

The WTO has consistently ruled against how the EU sets tariffs for bananas, forcing the 27-nation bloc to overhaul a system that grants preferential conditions for producers from African and Caribbean countries, mainly former British and French colonies.

Latin American producers and banana companies based in the United States have long complained about the preference. The U.S., in 1999, and Ecuador a year later both won the right to impose trade sanctions on European goods after the WTO found the EU's rules to be illegal.

A deal in 2001 gave the 27-nation EU five years to comply with WTO rulings. Brussels says a new banana tariff established last year _ €176 (US$234) per ton _ has brought its banana rules into compliance.

Colombia's WTO mission said it could not immediately comment on its move.

Ecuador, the world's largest banana producer, says the new tariff has actually taken away some of its market share in Europe, hurting more than 1 million Ecuadoreans dependent on the banana industry. It has cost the country about US$131 million (€98 million), according to trade negotiator Juan Holguin.

The EU has expressed disappointment with Ecuador's action and accused the country of seeking preferential treatment at the expense of some of the most vulnerable countries in the global trading system. Brussels says it supports a negotiated settlement.

Cameroon, the Dominican Republic and Jamaica are among the countries backing the EU. Colombia, Costa Rica, Guatemala, Honduras, Nicaragua and Panama voiced support for Ecuador's position. The U.S. response has been more ambiguous.

Latin American bananas currently have around 60 percent of the EU banana market, while African and Caribbean producers have 20 percent, EU officials have said. Bananas grown in the EU _ mostly on Spanish and French islands _ account for another 20 percent.

The 11-year-old dispute spawned a series of cases in the WTO as lawyers wrangled over procedural intricacies and legislation which had previously never been tested.

From:Associated Press WorldStream
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