WASHINGTON -- A two-year trade dispute involving the export of bananas by U.S. companies to European Union countries ended last week.
Under the terms of the agreement, the U.S. on July 1 will suspend sanctions imposed on about $191.4 million worth of EU imports since 1999, ranging from French handbags to bath and food products. In turn, the newly announced accord provides for bananas to be exported to the EU through licenses until 2006, when a tariff-only system will take effect.
"Today's step marks a significant breakthrough," European Commission and U.S. trade officials said in a joint statement. The European Commission represents the EU in international trade negotiations, among other matters.
The World Trade Organization authorized the sanctions in 1999 after ruling that the EU wrongly favored banana imports from their former colonies in the Caribbean at the expense of Latin America, where U.S. banana companies -- such as Chiquita Brands International, Cincinnati, and Dole Food Co., Westlake Village, Calif. -- have interests.
At the same time, the Office of the U.S. Trade Representative said that it reserves the right to retaliate again if the increased access for Latin American banana producers to the EU market does not take effect by January 2002.
About $117 million in sanctions on European imports -- mainly food products -- resulting from the EU's ban on U.S. hormone-fed beef were not a part of these negotiations. U.S. trade officials said they would treat the beef dispute as a separate matter.
"Sometimes you have to be at the brink on an issue before you find a way to reach a resolution," said a U.S. trade official during a telephone news conference last week. "I believe that both sides truly wanted to resolve this and we worked hard to do that."
The two sides -- headed by USTR Robert Zoellick and EU Trade Commissioner Pascal Lamy -- hinted at a truce over the banana dispute last month, shortly after Zoellick announced at a congressional hearing that he had reached the brink and had "no other recourse" than to change the sanctions list, which could have included a range of cashmere products.
Such a change in sanctions was mandated under legislation passed last year by Congress, commonly referred to as the "carousel amendment." Lawmakers said they felt earlier trade sanctions had not moved the EU to change its import policies.
The U.S. food industry welcomed the end of the trade dispute.
Steven G. Warshaw, president and chief operating officer of Chiquita, commented, "Subject to establishment of definitive regulations for the new [banana import] regime, we are pleased with this positive development for Chiquita and Latin American banana interests.
"We are grateful to those within the office of the U.S. Trade Representative and the affected Latin American governments who have worked tirelessly to bring about a banana import regime that is compatible with the EU's international trade obligations."
John Loughridge, vice president of marketing at Del Monte Fresh Produce Co., Coral Gables, Fla., told SN, "We are proponents of anything that will allow freer trade. And we are glad that this trade issue is getting resolved in a way that will be beneficial to us all."
"This has been a long and arduous journey for us," said Manly Molpus, president and chief executive officer, Grocery Manufacturers Association here, which has several fruit and produce distributors as members.
"Government and the industry have stood strong, not accepting earlier offers from the EU. I believe this truce puts us in the right direction, and hopefully we can move on from this," he said.
