EU to seek allies over banana row

 

The European Union (EU) today will seek strong support within the allies over World Trade Organisation (WTO) in its transatlantic row with the United States over banana imports.

The EU obtained an extraordinary session of the WTO's executive body, the General Council, to discuss the "banana war" which threatens trade relations between the two major economic blocs.

But the WTO cannot force the US to annul its decision last week which imposed $520 million (€475 million) in tariffs on a range of products from every EU state except Denmark and the Netherlands.

Washington's move provoked outrage across Europe and led to increased tension between the two giant trading partners.

The EU is now seeking support among the WTO's 134 members to fight what its representative, ambassador Mr Roderick Abbot, called "blatant disregard" for international trade regulations.

Mr Abbot also claimed the US had committed an "irresponsible unilateral action".

The US levied tariffs on products including Scottish cashmere, Spanish leather, Italian cheese, and French luxury goods.

Importers are required to post bonds against the duties with US customs, with the practical effect of pricing the EU imports out of the US market.

The tariffs, which are not yet being applied, will be retroactive from March 3rd if the WTO decides in favour of the United States and grants financial compensation for EU banana laws Washington has denounced as unfair.

A WTO panel is to decide between now and April 12th if changes to the EU regime continue to favour former colonies, mainly British and French, to the disadvantage of US companies in Latin America.

The original EU banana policy was judged contrary to trade rules by the WTO in 1977.

The present dispute goes beyond bananas however, which are only the first course on a menu of products including hormone-treated beef and genetically modified foods.

It also constitutes a major test of the international system for resolving trade disputes, which is coming under protectionist pressure and political-economic lobbying from all sides.

Japan, the world's second economic power and a frequent target of US trade criticism, on Friday came out against the US tariffs.

France and Britain, most often a US ally, slammed the US move last week, and the 14 Nations of the Caribbean Community (Caricom) also took Washington to task over the sanctions.

Some members fear the organisation could become paralysed just as it is due to choose a new general director, given the planned departure of Italy's Mr Renato Ruggiero in April.