Advertisement

U.S. Slices Tariffs in Banana War

ASSOCIATED PRESS

The Bush administration on Sunday formally lifted trade sanctions the United States had imposed on $191 million worth of French handbags, British bed linens and other European products in a fight over European banana barriers.

U.S. Trade Representative Robert Zoellick said the administration was satisfied with the steps the European Union had taken to implement an agreement the two sides had reached April 11. That deal will begin to dismantle the barriers American banana companies found objectionable.

The action on Sunday means the European products, effectively barred from the U.S. market because they faced 100% U.S. tariffs, will become available again.

Those products also include bath preparations, wallets, paperboard boxes, lithographs, batteries and coffee makers.

Advertisement

The Clinton administration imposed the duties after the EU refused to comply with a World Trade Organization ruling that the EU’s banana import barriers were inconsistent with WTO rules.

Zoellick, President Bush’s top trade negotiator, has made it a priority to work toward a resolution of the long-running banana dispute and a separate fight over EU restrictions on U.S. beef produced with growth hormones.

“This process represents a serious effort by the United States and the EU to manage our differences in a spirit of mutual respect,” Zoellick said.

Under the banana settlement, Europe agreed to increase its quotas gradually for bananas grown in Latin America until 2006, when all preferential quotas would be eliminated.

Advertisement

The new European licensing system was to take effect Sunday. The administration said Sunday it was satisfied the system met the terms of the agreement.

Two big U.S. companies--Chiquita Brands International Inc. and Dole Foods Co.--contended they had lost almost half of their European sales when the EU implemented a quota system in 1993 that gave preferential treatment to bananas grown in former European colonies in the Caribbean and Africa.

The administration hopes that its success in resolving the banana fight will set the stage for compromise with Europe on an even bigger issue: a potential $4 billion in trade sanctions Europe could impose on American products in retaliation for U.S. tax breaks awarded exporters that the WTO has ruled violate global trade rules.

Resolution of the banana case still leaves 100% tariffs on $116.8 million worth of European goods ranging from Danish ham to German chocolate, French mustard and Roquefort cheese. This trade retaliation was imposed by the Clinton administration because of a European ban on American beef produced with growth hormones.


Advertisement