The new Bush administration warned the European Union on Wednesday that it could target a new batch of EU goods for retaliatory duties in the ongoing banana trade dispute. In testimony before the House Ways and Means Committee, U.S. Trade Representative Robert Zoellick said he was prepared to defend American interestsin the banana case by rotating $191 million in U.S. sanctions to a new set of goods. Zoellick noted that there was some risk for the United States in that action because the EU has indicated it would then proceed with retaliation on billions ofdollars worth of American goods in a dispute over U.S. export tax breaks. European farm ministers in December approved a new "first-come, first-served" system for distributing banana import licenses that the EU says will bringit into compliance with World Trade Organization rules. However the US denies that this new system complies with the rules and is insisting on further negotiations. The WTO has ruled the EU's previous banana import rules unfairly favoured growers in EU territories and the Caribbean over Latin American producers.