. /.  WORLD TRADE  
ORGANIZATION  WT/GC/100 
30 November 2005 
 (05-5686) 
General Council 
1-2 December 2005 Original:   English 
 
 
 
HONDURAS’ PAPER ON THE JUSTIFICATION OF ITS SUBSTANTIAL SUPPLYING 
INTEREST CLAIM IN RELATION TO BANANAS 
 
Communication from the European Communities  
 
 
 The following communication, dated 29 November 2005, is being circulated at the request of 
the Delegation of the European Communities.  
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  In the paper circulated by Honduras prior to the meeting of the General Council last May 
(WT/GC/90 and Corr.1), Honduras seeks to substantia te its claim to be recognized as a Member 
having a “substantial supplying interest” under Ar ticle XXVIII of the GATT 1994 in relation to the 
envisaged modification of the EC’s schedule of commi tments in relation to imports of bananas into 
the EC.    The EC has continued to carefully examine the information provided by Honduras in its paper. As indicated in its interventions in inform al consultations and in the General Council, the EC 
remains of the view that Honduras does not have a “substantial supplying interest” under 
Article XXVIII of the GATT.    The EC notes that, according to EC statistics, the average EC imports of bananas of Honduras’ origin during the referenc e period of 2000 to 2002 was 83,913 tonnes, that is a share of 3% 
of total EC imports of MFN bananas. This is considerably lower than 10%. 
 
 Honduras claims that its substantial supplying inte rest arises from the fact that, even if it did 
not have a significant share of EC banana imports in the reference period, it “could reasonably be 
expected to have a significant share” in the EC ma rket “in the absence of discriminatory quantitative 
restrictions affecting their exports”, as foreseen  in paragraph 7 of the Interpretative Note to 
Article XXVIII of GATT.  This claim is not supported by the evidence provided in the paper 
circulated by Honduras.    Honduras has provided some statistical information on exports to the EC market for the years 1989 to 1991 as evidence of what its  market share in the EC would have been in the absence of the 
import regime established under EC Regulation 404/93. Honduras does not explain why it has chosen 
this period as relevant. This period is not the most recent period previous to the entry into force of the 
EC import regime on bananas.  
 
 Secondly, the EC notes that this export data  corresponds to 15 states and the EC membership 
was limited to 12 states during the period 1989 to 1991.  The information provided by Honduras 
therefore does not match the statistical information available to the EC and reflected in the Panel 
report in EC – Bananas III  of April 1997 (WT/DS27/R/GTM, HND).  According to this information WT/GC/100 
Page 2  
 
(paragraph 7.83 of the panel report), the average EC imports of bananas originating in Honduras in the period 1989-1991 was 136,858 tonnes (148,846 t in 1989; 123,381 t in 1990; and 138,322 t in 1991), as opposed to the substantially higher figur es quoted by the paper circulated by Honduras 
(210,064 t in 1989, 174,298 t in 1990 and 181,391 t in 1991) which would lead to an average of 188,584 t for the same period.  Hence, even if the choice of the period were correct, Honduras’ share 
would again be significantly lower than 10%.   
  Thirdly, the EC notes that the EC import regi me found inconsistent w ith Article XIII of the 
GATT in the case WT/DS27 was no longer in place during the reference period (2000-2002). In any case, the EC is of the view that Honduras has not  shown any causal link between the decrease in its 
market share and the application of the EC import re gime for bananas. To the contrary, the statistical 
information provided shows a significant decrease of th is market share already before the entry into 
force of Regulation 404/93 (from an alleged 10.29% in  1989 to a 6.87% in 1991). In addition, the EC 
notes that the market share of another country, na mely Ecuador, not partic ipating in the Bananas 
Framework Agreement experienced a significant increase after 1994. 
 
 Finally, the EC notes that it has always shown its willingness to address the situation of small and vulnerable countries in the WTO context. Howeve r, the EC cannot deviat e from the rules agreed 
by the WTO Membership in relation to Article XX VIII negotiations without a new agreement of that 
membership. The EC notes that paragraph 1 of  the Understanding on the Interpretation of 
Article XXVIII, intended to secure a redistributio n of negotiation rights in favour of small and 
medium-sized exporting members, refers to the re cognition of a “principal supplying interest” to a 
Member “which has the highest ratio of exports a ffected by the concession to its total exports”. 
Honduras is not claiming a principal supplier interest on this basis. 
 
 Irrespective of the formal issue of recogniti on of rights under Article XXVIII GATT, in its 
move to an import regime on bananas based on a tariff-only system the EC has sought to take into 
account the vulnerabilities of all the countries concerne d.  The EC remains ready to discuss this matter 
further with Honduras.   
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