US and EU banana dispute reaches an end

European Union agriculture ministers adopted regulations for a new banana-import system Wednesday, formally marking an end to a long-running dispute with the United States and Ecuador.

The new system "signals not only the end of the banana dispute but will result in the lifting of some $200 million worth of U.S. sanctions, which is the good news EU exporters have been waiting for,''​ EU Trade Commissioner Pascal Lamy said.

The new rules replace an EU system implemented in 1993 that gave preferential treatment to bananas grown in former European colonies in the Caribbean and Africa.

Franz Fischler, Commissioner for Agriculture and Rural development welcomed the agreement reached in the Council and said, "I am happy that we can now put this never ending story to rest. This allows us to settle a long running dispute with our trading partners and to see US sanctions on EU products definitively lifted. Without doubt, this will relieve the banana sector and is very positive for operators, who can, from now on, work in a clearer and more stable environment."​

Two big U.S. companies - Chiquita Brands International Inc. and Dole Foods Co. -- contended the system cost them almost half of their European sales, since most of their bananas come from plantations in central and South America. Chiquita filed for Chapter 11 bankruptcy protection last month.

In April 1999, the United States imposed trade sanctions on $191 million (€212.6m) worth of European specialty goods after it won a complaint filed against the EU at the World Trade Organisation.

Washington suspended the sanctions on July 1 after the EU's executive Commission put forward a package of measures modifying the import regime.

The new rules will grant former colonies access to 83 per cent of the total import quota of 2.4 million tons. Non-traditional suppliers like Ecuador will have the remaining 17 per cent.

In 2006, a tariff-only system will take effect.