What's New?
 - Sitemap - Calendar
Trade Agreements - FTAA Process - Trade Issues 

español - français - português
Search

World Trade
Organization

WT/DS27/RW/ECU
12 April 1999
(99-1443)
Original: English

European Communities - Regime for the Importation, Sale and Distribution of Bananas

- Recourse to Article 21.5 by Ecuador -

Report of the Panel


The report of the Panel on European Communities - Regime for the Importation, Sale and Distribution of Bananas - Recourse to Article 21.5 by Ecuador - is being circulated to all Members, pursuant to the DSU. The report is being circulated as an unrestricted document from 12 April 1999 pursuant to the Procedures for the Circulation and Derestriction of WTO Documents (WT/L/160/Rev.1). Members are reminded that in accordance with the DSU only parties to the dispute may appeal a panel report. An appeal shall be limited to issues of law covered in the Panel report and legal interpretations developed by the Panel. There shall be no ex parte communications with the Panel or Appellate Body concerning matters under consideration by the Panel or Appellate Body.


Table of Contents

I. Introduction

(i) Terms of reference
(ii) Panel composition
II. Factual Aspects A. Access Quantities and Country Allocations (i) Traditional ACP imports
(ii) Third-country and non-traditional ACP imports
B. Tariff Treatment
C. Administrative Aspects of the Banana Import Regime (i) Eligible operators
(ii) Determination of traditional operators' reference quantities and newcomer allocations
(iii) Import licensing procedures
D. Lomé Waiver
III. Procedural Issues
IV. Main Arguments
A. General
B. Issues related to the GATT 1. Article I Issues (i) Traditional ACP bananas
(ii) Non-traditional ACP bananas
2. Article XIII issues
C. Issues related to the GATS (i) General
(ii) Central Product Classification
(iii) Issues of "Actual Importer" and of de facto discrimination
(iv) Issues concerning customs clearance
(v) Newcomers
(vi) Remedial action
D. Conclusion
V. Arguments By Third Parties A. Brazil
B. Cameroon and Cote d'Ivoire 1. Issues related to the GATT (i) Traditional ACP bananas
(ii) Non-traditional ACP bananas
2. Issues related to the GATS
C. The Caribbean States 1. Issues related to the GATT (i) Traditional ACP bananas
(ii) Non-traditional ACP bananas
(iii) Article XIII issues
2. Issues related to the GATS
D. Colombia 1. Article XIII Issues E. Costa Rica 1. Issues related to the GATT F. Ecuador's Response to Third Parties
VI. Findings A. Working Procedures and Timetable
B. Terms of Reference
C. Article XIII of GATT 1994 1. The 857,700 tonnes reserved for traditional imports from ACP States (a) The Applicability of Article XIII
(b) The Requirements of Article XIII and the 857,700 Tonne Tariff Quota for Traditional ACP Imports (i) Article XIII:1
(ii) Article XIII:2
(c) The Requirements of the Appellate Body report in Bananas III
2. Ecuador's Share of the MFN Tariff Quota (a) The Requirements of Article XIII
(b) The Representative Period
(c) Special Factors
(d) Ecuador's Country-Specific Tariff-Quota Share
D. Article I of GATT 1994 1. The Lomé Waiver
2. The Requirements of the Lomé Convention
3. Preferences for Traditional ACP Imports (a) The Level of 857,700 Tonnes and Pre-1991 Best-Ever Export Volumes
(b) Collective Allocation to Traditional ACP States
4. Preferential Tariffs for Non-Traditional ACP Banana Imports (a) The Preferential Tariff of Zero for Non-Traditional ACP Bananas
(b) The Tariff Preference of 200 Euro per tonne for Non-Traditional ACP Bananas
E. GATS Issues 1. The Scope of the EC's Commitments on "Wholesale Trade Services"
2. Licence Allocation Procedures (a) Articles II and XVII of GATS
(b) The Findings in Bananas III on Articles II and XVII of GATS
(c) The Revised EC Licensing Regime
(d) The Requirements of Articles XVII and II of GATS
(e) The Parties' Arguments (i) Ecuador
(ii) European Communities
(f) The Panel's Analysis of the Claim (i) General EC arguments
(ii) Licence allocations under the revised regime
(iii) The structure of the revised regime
(iv) Overall evaluation
(g) The "Single Pot" Licence Allocation
3. The Rules for "Newcomer" Licences
4. General observations
F. Suggestions on Implementation
G. Summary
H. Concluding Remark
VII. Conclusions
Annex I
Annex II
Annex III

    I. Introduction

  1. On 18 August 1998, Ecuador, Guatemala, Honduras, Mexico and the United States acting jointly and severally, requested consultations (WT/DS27/18) with the European Communities in relation to the implementation of the recommendations of the Dispute Settlement Body (DSB) in the matter of the EC's regime for the importation, sale and distribution of bananas established by Council Regulation (EEC) No. 404/93 as amended by Council Regulation (EC) No 1637/98. Consultations were held on 17 September 1998. These consultations did not result in a mutually satisfactory solution of the matter.
  2. On 13 November 1998, Ecuador requested the reactivation of the 17 September 1998 consultations (WT/DS27/30 and Add.1). Consultations were held between the European Communities and Ecuador on 23 November 1998. As these consultations did not result in a mutually satisfactory solution of the matter, Ecuador requested, on 18 December 1998, the DSB to reconvene the original panel in accordance with Article 21.5 of the DSU to examine the implementation of the DSB recommendations in the light of the General Agreement on Tariffs and Trade (GATT), the General Agreement on Trade in Services (GATS), and the Agreement on Import Licensing Procedures (WT/DS27/41).
  3. The DSB, at its meeting on 12 January 1999, established a panel with the original panel members in accordance with Article 21.5 of the DSU. Brazil, Belize, Cameroon, Colombia, Costa Rica, Côte d'Ivoire, Dominica, Dominican Republic, Grenada, Haiti, Jamaica, Mauritius, Nicaragua, Saint Lucia, and Saint Vincent and the Grenadines reserved their third party rights to make a submission and to be heard by the Panel in accordance with Article 10 of the DSU.
  4. (i) Terms of reference

  5. The following standard terms of reference applied to the work of the Panel:
  6. "To examine, in the light of the relevant provisions of the covered agreements cited by Ecuador in document WT/DS27/41 the matter referred to the DSB by Ecuador, in that document and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements."

    (ii) Panel composition

  7. The Panel was composed as follows:
  8. Chairman:Mr. Stuart Harbinson
    Members:Mr. Kym Anderson
    Mr. Christian Häberli

  9. The Panel submitted its report to the parties to the dispute on 6 April 1999.
  10. II. Factual Aspects

  11. The complaint examined by the Panel relates to the EC implementation of the DSB's recommendations in the matter European Communities - Regime for the Importation, Sale and Distribution of Bananas concerning the EC's import measures for bananas. The EC implementation measures at issue are contained in the following regulations: (i) Regulation (EC) No. 1637/98 ("Regulation 1637") amending Regulation (EEC) No. 404/93 ("Regulation 404") on the common organization of the market in bananas, and (ii) Regulation (EC) No. 2362/98 ("Regulation 2362") laying down detailed rules for the implementation of Regulation 404. Regulations 1637 and 2362 have been applied as from 1 January 1999.
  12. A. Access Quantities And Country Allocations

  13. Regulation 1637 provides for access to the EC market for three categories of banana imports: traditional ACP imports, non-traditional ACP imports, and imports from third (non-ACP) countries.
  14. (i) Traditional ACP imports

  15. Traditional ACP imports are defined as banana imports from twelve ACP countries 1 up to an annual aggregate limit of 857,700 tonnes. 2 As part of its implementation measures of the above-mentioned DSB recommendations, the EC has eliminated the country-specific allocations that previously existed for each of the twelve ACP countries. The aggregate import volume is not bound in the EC Schedule and there is no provision in the EC regulations for an increase in the level of the traditional ACP quantity.
  16. (ii) Third-country and non-traditional ACP imports

  17. The EC has a tariff quota commitment for banana imports of 2.2 million tonnes (net weight) bound in its Schedule. Regulation 1637 provides for additional tariff quota access of 353,000 tonnes per year. 3 This latter quantity is not bound in the EC Schedule (autonomous tariff quota).
  18. The aggregate tariff quota quantity of 2.553 million tonnes has been allocated to Colombia, Costa Rica, Ecuador, and Panama and an "others" category in the proportions set out in Table 1. According to Regulation 2362, the country-specific allocations are based on imports into the EC during the years 1994 to 1996. 4 There are no specific provisions for reallocating unfilled portions of the country-specific allocations or the "others" category. 5 The "others" category of the tariff quota is reserved for imports of third-country bananas as well as non-traditional ACP bananas.
  19. Table 1 – EC Tariff Quota Allocations

    Country

    Share (%)

    Volume ('000 tonnes)

    Colombia

    23.03

    588.0

    Costa Rica

    25.61

    653.8

    Ecuador

    26.17

    668.1

    Panama

    15.76

    402.4

    Other

    9.43

    240.7

    Total of the above

    100.00

    2,553.0

    Note: Calculation of shares done by Secretariat based on 2.553.0 million tonne tariff quota and the percentage shares according to Annex I to Regulation 2362.

  20. Non-traditional imports from ACP countries cover any quantities supplied in excess of traditional quantities supplied by ACP countries (i.e. in excess of 857,700 tonnes) or any quantities supplied by ACP countries which are not traditional suppliers to the EC, such as the Dominican Republic. Non-traditional bananas may be imported duty-free under the "others" category of the tariff quota and are limited to 240,748 tonnes (9.43 per cent of the 2.553 million tonne tariff quota). The country-specific allocations for non-traditional ACP imports provided for in EC Regulation 478/95 as the result of the Banana Framework Agreement (BFA) (totalling 90,000 tonnes) have been eliminated. 6
  21. B. Tariff Treatment

  22. Table 2 shows the EC tariffs applicable to traditional ACP, non-traditional ACP as well as third-country banana imports. It also summarizes the key modifications of the banana import regime with respect to tariffs, country-specific allocations and volumes which the European Communities has undertaken as part of its implementation measures.
  23. Table 2 – The EC Import Regime for Bananas since 1 January 1999

    Category of banana imports

    Access volume

    Source/definition

    Tariffs applied

    Modifications of the EC tariff quota regime under Regulations 1637 and 2362

    Traditional ACP bananas

    857,700 tonnes

    Imports without country-specific quantitative limits from 12 traditional ACP countries.*

    Duty-free

    - elimination of country-specific allocations.

    Non-traditional ACP bananas

    2,553,000 tonnes

    Imports of traditional ACP quantities above the 857,700 tonnes or any quantities supplied by ACP countries which are non-traditional suppliers.

    Duty-free up to 240,748 tonnes. For additional imports the bound out-of-quota duty (currently 737 Euro per tonne minus 200 Euro per tonne) applies.

    - elimination of country-specific allocations and "other" category totalling 90,000 tonnes.

    - increase in duty-free access opportunities from 90,000 tonnes to 240,748 tonnes under the "others" category of the 2.553 million tonnes tariff quota.

    - increase of the margin of preference for out-of-quota imports from 100 to 200 Euro per tonne.

    Third-country bananas

    Imports from any non-ACP source.

    75 Euro per tonne up to 2.553 million tonnes. There are 4 country-specific allocations plus an "others" category. For additional imports the bound out-of-quota tariff applies (currently 737 Euro per tonne).

    - modified country-specific allocations allocated to four Members and an "others" category

    - transferability of unfilled portions of country-specific allocations eliminated

    - increase in access opportunities by 90,000 tonnes to 2.553 million tonnes as the result of the elimination of country-specific allocations to non-traditional ACP suppliers.

    *Belize, Cameroon, Cape Verde, Côte d'Ivoire, Dominica, Grenada, Jamaica, Madagascar, Somalia, St. Lucia, St. Vincent and the Grenadines, and Suriname.

To continue with Administrative Aspects of the Banana Import Regime


1 Belize, Cameroon, Cape Verde, Côte d'Ivoire, Dominica, Grenada, Jamaica, Madagascar, Somalia, St. Lucia, St. Vincent and the Grenadines, and Suriname, see Annex to Regulation 1637.

2 Annex I to Regulation 2362.

3 Article 18.2 of Regulation 1637.

4 Paragraph (2) of Regulation 2362.

5 The provisions which allowed the reallocation of unfilled portions of the country-specific allocations have been repealed, see Article 31 of Regulation 2362.

6 Article 31 of Regulation 2362.