US suspends banana sanctions

US suspends sanctions imposed on EU exports after WTO ruled against its banana import regime

Pascal Lamy, European Trade Commissioner, welcomed the US move and said: "This is a very good signal at a time when we are working together on launching a New Round of global trade negotiations."



The US suspended on 1 July the $191 million in sanctions it placed on a range of EU imports in April 1999 following a WTO ruling against the EU's banana import regime. The suspension is part of a deal struck between the EU and the US in April of this year and comes in response to the EU's introduction of a licensing system for banana imports based on historical trade patterns that also applies from 1 July.


The dispute began in 1993 when the EC introduced a new import regime for bananas that favoured ACP countries at the expense of Latin American producers. The WTO declared it illegal on several occasions following adjustments before finally authorising the US to impose sanctions on the EU to a value of $191 million in April 1999. An agreement was reached in April 2001 between the EU and the US that introduces a new regime based on a tariff system from 1 January 2006.


The EU will adjust quota quantities in order to expand market access for Latin American countries whilst securing market share for a specific quantity of bananas from ACP countries. Once these changes receive WTO approval, US sanctions will be lifted permanently. The new tariff-based system for managing banana imports to the EU is scheduled for introduction on 1 January 2006.

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