The New York Times business section says that a compromise deal has been reached. The U.S. says it is happy with it, although reading between the lines there is more discussion ahead. Here's the story:
January 30, 1999
Trade Body Resolves Banana Battle, for Now at Least
By ELIZABETH OLSON
GENEVA -- After five days of intense wrangling, members of the World Trade Organization reached a compromise Friday night in the politically charged banana dispute, which appears to have averted, at least for now, a major rift between the United States and the European Union.
The issue confronting the trade group's two largest members is an accusation that Latin American producers have been illegally thwarted in efforts to sell their fruit on the European market. The trade group originally ruled against the 15-nation European Union, requiring changes in a banana import policy that favored Caribbean countries, many of them former European colonies.
The European Union revised the banana policy Jan. 1, but the United States, acting on behalf of its banana marketing companies, rejected the new measure as equally discriminatory -- even though the United States does not export bananas. Washington then asked for sanctions within the 30 days specified under World Trade Organization rules. The European Union countered that the U.S. move was unilateral and outside the consensus-based way the 133-nation trade body does business.
Friday night a deal was struck that ended the impasse, which had ground the trade body's core work, dispute resolutions, to a halt. The trade group's top official, Renato Ruggiero, praised the compromise arrangement as "a great success for the rule of law that is at the basis of our system."
It allows Washington to lodge its request for 100 percent tariffs on $520 million in European goods. But the stop-the-clock arrangement delays any European Union retaliation by allowing a world trade body official to first determine the amount of the sanctions.
The amount is supposed to be equal to the losses suffered from the European Union banana import policy, and could be imposed as early as March 12, said Rita Hayes, a U.S. trade diplomat.
The deal was "exactly what we wanted. It was a big win for us," Ms. Hayes told reporters. But it came after a bruising week of acrimonious finger-pointing, repeatedly postponed meetings, and public suggestions that the four-year-old world trade body was foundering.
Underlying the trade tensions was the announcement this week by U.S. Trade Representative Charlene Barshefsky that the Clinton administration would issue an executive order restoring "Super 301," a process in which the United States imposes sanctions on countries it considers to have protectionist barriers against U.S. exports.
The action, disclosed during Ms. Barshefsky's testimony before the Senate Finance Committee, came amid a considerable rise in the United States trade deficit, fueled by American consumer purchases of inexpensive foreign goods.
Brussels and Tokyo, both engaged in important trading disputes with the United States, immediately denounced the step. The European Union announced Friday that it would seek a review of the measure at the trade organization's meeting in February.
Four years of cementing a world trade system seemed shaky this week, as Washington found itself verbally pummeled by other members of the trade body. While there was no head count -- the organization's debates are closed to the public -- it appeared few nations backed the U.S. position.
"You need an impartial decision on violations, not a decision by one country alone," said Norway's envoy, Kaare Bryn. 'We don't take a position on bananas. It's a complicated dispute that has existed for many years, but one country can't be the judge and the jury." |
