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. Last Updated: 07/27/2016

Trade Body Takes Up EU-U.S. Banana Dispute




GENEVA -- The European Union appealed Monday to the full membership of the World Trade Organization to denounce U.S. sanctions in the trans-Atlantic banana trade dispute.


"There is a very wide feeling that they have done the wrong thing," said Ambassador Roderick Abbott, head of the EU trade delegation in Geneva, at the start of an emergency meeting of the WTO general council, the organization's top decision-making body.


But U.S. officials were adamant that the measures taken by President Bill Clinton's administration were the proper way to proceed against EU foot-dragging after the WTO told the 15-nation trading bloc to make its banana import policies comply with global trade rules.


"We are very sorry that things had to come to this point, but we are going to reserve our rights," said Ambassador Rita Hayes, head of the U.S. delegation.


The bitter dispute already has legal experts on both sides testing the ability of the four-year-old organization to maintain global trade rules. Some countries feared Monday's high-profile meeting might only worsen the dispute between the two most powerful members.


The WTO summoned all 134 member countries to the meeting requested by the EU after Washington ordered importers to deposit funds to cover sanctions pending before the trade body.


The United States accuses the European Union of failing to carry out WTO rulings against its selective banana import policy, which the United States claims favors producers in former European colonies at the expense of U.S.-owned producers with huge plantations in Central and South America.


Pending before the WTO is Washington's proposed 100 percent tariffs on $520 million worth of European goods.


The sanctions, which would double the price of targeted products, are meant to equal the lost sales claimed by U.S.-owned banana companies. After the WTO last week delayed approving the U.S. tariffs, the Clinton administration notified U.S. importers that they must deposit funds to cover the tariffs pending a WTO decision.


The U.S. requirement means that Washington is in effect implementing the sanctions without first having WTO approval, said Abbott.


The tariffs would apply to a wide range of European products chosen by the Clinton administration to penalize particularly those EU countries that supported the banana policies, including handbags, coffee makers and cashmere sweaters.


Denmark and the Netherlands are excluded, but all other countries are affected. Britain, one of the hardest hit, has been outspoken in its protest.


The EU is initially asking only that the council hear and discuss its complaint and that other members speak out on its side.


Meanwhile, angered by the U.S. position in the dispute, Caribbean Community nations have agreed to suspend a treaty of cooperation with the United States to fight drug trafficking, an official said Sunday.


The treaty signed in Barbados by President Bill Clinton in May 1997 calls for cooperation by Caribbean nations in anti-drug trafficking measures and extradition of suspects. But regional leaders have increasingly complained that Washington has ignored its end of the bargain by failing to address economic issues so important to the Caribbean.


Leonard Robertson, a spokesman for the 14-member Caribbean Community, known regionally as Caricom, said the decision to suspend the treaty was seen by Caribbean leaders as the strongest way to send a message to Washington.


Smaller Caribbean producers say they cannot compete with the larger Latin American plantations and need the preferences given to them by some European countries.