EU May Yield in Banana Fight After WTO Backs U.S.
The Europeans signaled Monday that they were ready to forge a truce in the so-called banana wars after the World Trade Organization gave the U.S. the official go-ahead to impose hefty tariffs on European goods valued at $191.4 million a year.
After a WTO arbitration panel lifted the final hurdle to U.S. tariffs aimed at penalizing the European Union for its restrictive banana import policies, EU Trade Commissioner Sir Leon Brittan said he wanted to return to the negotiating table.
Brittan said in Washington that he supports the “substance” of the WTO’s findings on bananas and would work to bring his government’s import policies in line with global trade rules. But he said his government still maintains its right to appeal some of the “procedural” issues surrounding the U.S. trade complaints.
Skepticism about the EU’s sincerity remains high at the Office of the U.S. Trade Representative, where the banana flap and another fight over Europe’s ban on hormone-treated beef are viewed as a tedious and costly string of failed negotiations and broken promises by U.S. trading partners in Europe.
The U.S. contends the EU is threatening the world’s fragile economy by repeatedly failing to comply with rulings by the WTO, the Geneva-based organization established to police the global trading system.
But the EU, under attack for its banana import policies for nearly a decade, claims that it has altered its practices and tried to follow the rules. And it complains the U.S. has also violated the WTO’s rules by retaliating against the EU in an unfair manner.
So far, the EU has gained little ground with either the U.S., which filed the banana complaint on behalf of big U.S. exporters such as Dole Food Co. and Chiquita Brands International Inc., or the WTO.
Helaine Klasky, a spokeswoman for the U.S. trade representative, said victory in the banana dispute won’t be declared until the European Union actually revises its import policies that favor banana growers from former European colonies in the Caribean and Africa.
“We are hopeful they will really change, but the proof is in the action and not the rhetoric,” Klasky said.
But the Europeans contend they are not certain exactly how far they must go to satisfy the WTO.
“As we understand it, [the WTO] hasn’t really questioned our right to have certain preferences to these countries,” EU spokeswoman Ella Krukoff said. “The question is, how do you have these preferences and work them out so they are WTO-legal?”
Brittan requested another round of trade talks in a meeting with U.S. Trade Representative Charlene Barshefsky, according to Klasky. In addition, the two trade czars also discussed the recent progress made on China’s bid to join the WTO and this fall’s WTO ministerial meeting in Seattle.
The EU’s top banana negotiator is expected to arrive in Washington as early as today and the talks could resume later this week.
The EU is clearly feeling pressure. In addition to Monday’s banana-related tariffs of 100% duties--retroactive to March 3--on European products ranging from bath salts to lead-acid storage batteries, the U.S. is threatening to levy punitive tariffs on an additional $900 million worth of European foie gras, chocolates and other products unless the beef dispute is resolved.
In addition to siding with the U.S. on bananas, the WTO recently supported the U.S. contention that there is insufficient scientific evidence to justify the EU’s ban on hormone-treated beef. Those tariffs could take effect next month.
