Posted on: Thursday, April 12, 2001

EU settles eight-year dispute with U.S. on banana trade

USA Today

WASHINGTON — The United States and the European Union settled their standoff over bananas, closing the books on an eight-year dispute that culminated in 1999 with U.S. penalties on $191 million in European products.

Because of the deal, announced yesterday, 100 percent tariffs on everything from Danish hams and French handbags to Italian bed linen and a handful of other goods will be lifted July 1.

The tariffs had sent reverberations locally, with Hawai'i luxury goods retailers saying they faced having to double prices, stop stocking certain items, or absorb some of the higher costs themselves.

World Trade Organization panels twice ruled that the EU unfairly favors Caribbean and African bananas and European distributors over Latin American fruit distributed by U.S. companies Chiquita and Dole.

The EU resisted changing its rules because it wanted to protect its fruit companies and give preference to bananas from its territories and former colonies.

Under the deal, the EU's quotas in favor of its former colonies and territories will be eliminated after five years.

During the transition, Chiquita and Dole will get distribution licenses based on their 1994-1996 sales in the EU. During and after the transition, certain preferences still will go to bananas from former colonies, such as Cameroon and Ivory Coast in Africa and St. Lucia, Jamaica and Grenada in the Caribbean.

Bananas are a major source of income for several Caribbean and African countries, which generally can't grow them as cheaply and efficiently as Latin American countries because of soil and other conditions.

"We are upset the U.S. jumped into the fray. It took the viewpoint of one or two companies on an issue where thousands of people worldwide owe their living to bananas," said Marshall Hall, a Jamaican executive who chairs the Caribbean Banana Exporters Association. "We thought the U.S. had a broader perspective."