WTO rules against EU banana import practices

(GENEVA) - The World Trade Organisation ruled Thursday that the European Union's banana importing practices violate international trade rules, a diplomatic source said here.

The WTO upheld a complaint from Ecuador challenging an EU system governing banana imports, implemented January 1, 2006, that imposed custom duties of 176 euros (260 dollars) per tonne on bananas from countries outside the Africa-Caribbean-Pacific (ACP) group.

Ecuador, the leading exporter of bananas to the European Union, argued that the system was preventing it from maintaining its share of the European market.

Quito said its share fell to 27.5 percent in the first eight months of 2006 from 29.9 percent in the same period of 2005.

A preliminary report from the WTO delivered confidentially to the parties earlier this week found that the EU importing scheme was inconsistent with global trade rules, the source said.

Bananas from Latin America account for four fifths of EU imports, with the remainder coming from African, Caribbean and Pacific nations.

ACP bananas enter the European Union duty free under a quota of 750,000 tonnes a year.

Under previous practices, bananas from Latin America and non-ACP countries were subject to a tariff of 75 euros a tonne under a certain quota level and 680 euros a tonne above that level.

A spokesman for the European Union, referring to the preliminary finding, claimed earlier Thursday that imports in the EU had increased from Latin American producers.

"Data show that imports from Latin American countries have increased substantially -- 10.7 percent in 2006 compared to 2005 and 8.0 percent in the first three quarters of 2007 compared to the same period in 2006 -- since the introduction of the Tariff Only regime in 2006."

He maintained that "it is through negotiations, not litigation, that we will find a solution that is satisfactory for all suppliers."