EU Expected to Move on Bananas This Week

14 December 1998

The EU this week is expected to extend an olive branch to the U.S. in an effort to settle the two sides' dispute over whether the EU has gone far enough in its revised banana import regime to
comply with the spirit of a 1997 WTO Panel ruling. The proposal could revive EU-U.S. banana talks, which broke down earlier this month. (See BRIDGES Weekly Trade News Digest Vol. 2, No. 47, December 7, 1998 and BRIDGES Weekly Trade News Digest Vol. 2, No. 44, November 16, 1998).

It is expected that the EU will ask a WTO Dispute Settlement Panel to rule as soon as possible whether its revised regime does comply with the 1997 ruling. The EU until now has been dissuaded from conceding this option, as it would suggest that the EU was indeed unsure whether its regime does comply. It is unclear whether this option, if put forward as expected December 15, would satisfy the U.S. It does come closer to previous U.S. demands that a WTO panel review the EU revised banana regime by January 15.

The EU and U.S. are scheduled to hold a summit on overall trade relations at week's end. The EU proposal would be an effort to keep the banana dispute from overshadowing that meeting between U.S. President Bill Clinton and European leaders. The EU announcement would also coincide with the publication December 15 of the U.S. list of products subject to 100 percent duties effective late next month unless the EU changes its revised regime. The U.S. list is expected to target products from EU member-states that have opposed opening the EU banana market, such as France, Austria and Finland.

"Dispute: EU softens banana line with U.S.," FINANCIAL TIMES, December 14, 1998; "EU ready to ask WTO to review its banana policy," JOURNAL OF COMMERCE, December 15, 1998; "U.S. strategy in banana tiff: divide and conquer," JOURNAL OF COMMERCE, December 9, 1998; "U.S. rejects Ruggiero request to meet with EU to resolve banana fight," INSIDE US TRADE, December 11, 1998.

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