. /.WORLD TRADE
ORGANIZATIONWT/DS27/40
15 December 1998
(98-5063)
Original:  English
EUROPEAN COMMUNITIES – REGIME FOR THE IMPORTATION,
SALE AND DISTRIBUTION OF BANANAS
Request for the Establishment of a Panel by the European Communities
The following communication, dated 14 December 1998, from the Permanent Delegation of
the European Commission to the Chairman of th e Dispute Settlement Body, is circulated in
accordance with Article 21.5 of the DSU.
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On 25 September 1997, the Dispute Settlement  Body (DSB) adopted the Appellate Body
Report in European Communities – Regime for the Im portation, Sale and Distribution of Bananas ,
WT/DS27/AB/R, and the Panel Reports in WT/DS27/R/ECU, WT/DS27/R/GTM-WT/DS27/R/HND,
WT/DS27/R/MEX, WT/DS27/R/USA, as modified by the Appellate Body Report, recommending
that the European Communities bring the measures found to be inconsistent with the GATT 1994 and
the GATS into conformity with the obligations of the European Communities under those agreements.
On 7 January 1998, the Arbitrator appointed in accordance with Article 21.3(c) DSU
concluded that the reasonable period of time to implement the recommendations and rulings of the
DSB in this case would expire on 1 January 1999.
On 20 July 1998, the Council of the European Union adopted Regulation (EC) No. 1637/98
amending Regulation (EEC) No. 404/93 on the common organisation of the market in bananas.  This
Regulation entered into force on 31 July 1998.  It will apply from 1 January 1999.
On 18 August 1998 Ecuador, Guatemala, Honduras, Mexico and the United States requested
consultations under Article 21.5 of the DSU (WT/DS27/18) concerning this Regulation.
Consultations between Ecuador, Guatemala, Honduras, Mexico and the United States with theEuropean Communities took place on 17 September 1998.
In the DSB meeting of 22 September 1998, the original complainants expressed their concern
“about the EC’s failure to comply with the DSB’s recommendations”.  They stated that “consultations
had confirmed that the Community and the complaining parties could not agree on the WTO-consistency of the measures taken by the EC to comply with the DSB’s recommendations by
1 January 1999”.  They emphasised that “[t]here was no doubt with regard to the existence of such a
disagreement between the Community and the complain ing parties”.  They also stated that “they had
made it clear that there was no basis for any further consultations and had no plans to hold further
consultations”.
On 28 October 1998, the Commission of the European Communities adopted Regulation (EC)
No. 2362/98 laying down detailed rules for th e implementation of Council Regulation (EEC)
No. 404/93 regarding imports of bananas into the Co mmunity.  This Regulation entered into force on
1 November 1998.  It will apply from 1 January 1999.WT/DS27/40
Page 2
On 13 November 1998, Ecuador requested consu ltations (WT/DS27/30) which took place on
23 November 1998.  Mexico also requested consultations and was joined as co-complainant in the
same meeting.  These consultations concerned the Commission Regulation 2362/98.
One of the original complainants, the United States, has officially announced that it will make
a unilateral determination that the EC implementing measures fail to implement the DSB
recommendations, and that it will, despite the absence of any multilateral determination that the ECimplementing measures fail to comply with the DSB recommendations and rulings, introduce trade
sanctions against EC exports in the near future.
The European Communities strongly rejects this unilateral approach which is a blatant
violation of the explicit obligations that the United States has accepted in Article 23, paragraph 2(a) ofthe DSU.  Given this fact, any approach by the United States to seek DSB authorisation for
suspension of concessions on the basis of such a unilateral determination would equally be
inadmissible and any proposal in this sense (as the United States has announced will be made on
January 21
st) will in itself put at risk the future of the WTO dispute settlement system.  The European
Communities has in this context already on 25 November 1998 requested dispute settlementconsultations with the United States regarding the Section 301 procedure of the 1974 Trade Act,
which is the domestic legal basis for these unilateral US actions.
The European Communities submits that Article 23 of the DSU confirms that there is a
general principle in the WTO agreements that measures taken by WTO Members are in conformitywith their rules unless they have been challenged  under the appropriate dispute settlement procedures
and proven not to conform.  Since none of the original complainants has continued to pursue the
procedures under Article 21.5, they must presently be deemed to be satisfied with the way in which
the European Communities has brought its measures  into conformity with the recommendations and
rulings of the DSB in this case.
Within this legal context, the European Comm unities requests the establishment of a panel
under Article 21.5 of the DSU with the mandate to find that the above-mentioned implementing
measures of the European Communities must be presumed to conform to WTO rules unless their
conformity has been duly challenged under the appropriate DSU procedures.
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