ABSTRACT

BANANAS were the cause of a trade dispute between the European Union (EU) and the USA throughout the 1990s. The EU’s banana regime had always been strongly contested as it granted preferential access to British and French markets to banana producers in their former colonies among the ACP (African, Caribbean and Pacific) States. The EU banana trade regime (BTR) antagonized the Government of the USA as it restricted access for US producers. With the support of several Central American producers, an appeal was made by the USA to the World Trade Organization (WTO) disputes settlement panel against this apparent discrimination. The WTO backed the US complaint and forced the EU to reconsider its BTR. Although a majority of EU member states wanted to abolish the BTR, a minority, including France and the United Kingdom, wished to defend it. Efforts to enlarge the quota for Central American producers were rejected by the USA in 1999 and heralded the imposition of substantial tariffs on a range of British and French goods entering the US market. This trade war was resolved in April 2001 when a resolution was reached between the EU and the USA, which agreed a transition to a tariffonly system by 2006. Despite this, in June 2007 the USA again raised allegations at the WTO that EU treatment of Latin American banana producers was unfair, citing the continued existence of a ‘discriminatory’ tariff quota. In December 2009, after much deliberation, the EU-Latin American Bananas Agreement finally sought to end the 20-year dispute between the EU and Latin America over the former’s preferential treatment of the ACP states. In the agreement, the EU opted to reduce its tariffs and the Latin American states pledged to abandon all disputes over bananas before the WTO. It was hoped that the agreement would bring greater stability to the banana market.