PRESS RELEASE 
 
PRESS/591Rev.1* 
15 December 2009 
 
(09-6588) 
DIRECTOR-GENERAL 
Lamy Hails Accord Ending Long Running Banana Dispute 
Director General Pascal Lamy today applauded the successful efforts of  Latin American banana 
producing nations, the United States and the European Union to end their long running dispute over trade in bananas. 
 
"I welcome the news that a comprehensive agreement on bananas has now been reached. This has been one of the most technically complex, politically sensitive and commercially meaningful 
legal disputes ever brought to the WTO. It has also been one of the longest running "sagas" in the 
history of the post-WWII multilateral trading system," he said.   
"After lengthy consultations, legal examinations, negotiations, and gentle prodding by an "honest 
broker", a solution has been found. This proves th ere is no trade issue which lies beyond the reach 
of WTO members when they exhibit good will and a spirit of compromise. I hope that the same 
pragmatism, creativity and diplomacy will help move forward the Doha Round negotiations."  
  
Note to Editors: 
 Background information attached.  
                                              
 
* In English only. 
  
 PRESS/591/Rev.1 
Page 2 of 7 
 
 
  Chronology of the banana disputes in GATT/WTO 
 Introduction  
The banana issue is one of the longest running disputes in the post-WWII multilateral trading 
system. It has generated considerable debate and litigation among the widest range of the entire WTO membership. And it has resulted in multiple legal rulings by dispute panels, the Appellate 
Body and special arbitrators. All this attention has focussed on the treatment the European Union 
gives to the import of bananas from the African, Caribbean and Pacific (ACP) countries in preference to bananas from Latin America. Today, the final, comprehensive agreement has been 
announced. 
 In the GATT 
 
In July 1991 , Costa Rica expressed concern in the GATT Council meeting that an impending EU 
banana import regime would discriminate against Central American countries. It urged agreement 
in the Uruguay Round for free trade in bananas. Colombia, Honduras, Peru, Venezuela and Mexico 
shared this concern.  
In June 1992 , Colombia, Costa Rica, Guatemala, Nicaragua and Venezuela requested 
consultations with the EU. In September 1992 , they announced that the consultations had failed 
and requested the GATT Director-General to use his good offices. 
 
In December 1992 , these five Latin American countries accepted the DG's suggestion that, in 
order to make progress, the formal good offices be suspended until January 1993 and to leave the 
door open for informal negotiations that would make it possible to find a solution within the 
Uruguay Round commitments.  
In February 1993 , the five complainants stated at th e GATT Council that the good offices 
exercise had failed as a result of the decision by the EU Council of Ministers on 17 December 1992 to establish a common banana regime that would enter into force in July 1993. According to the 
five Latin American countries, the new regime would violate the 20 per cent maximum tariff 
binding on bananas granted by the EU in the 1961 Dillon Round, as well as various other GATT provisions. 
 
At the request of the five countries, a panel was established which ruled in June 1993  that the 
banana import restrictions applied by several EU member states violated GATT Article XI 
(quantitative restrictions) and that the tariff preference granted by the EU to bananas from 
African, Caribbean and Pacific (ACP) countries violated the MFN principle and could not be justified under GATT Article XXIV (FTAs & customs unions). 
 
Until 1 July 1993, each EU member state mainta ined its own banana import regime, with some 
member states having special arrangements favouring their former colonies. On 1 July 1993 , a 
new EU-wide banana import regime came into e ffect. The same five Latin American countries 
requested a new panel to examine the new unified banana import regime.  
On 11 February 1994 , the second panel also ruled against the new banana import regime.    PRESS/591/Rev.1 
 Page 3 of 7 
 
 
  In the WTO 
 
In February 1996 , dissatisfied with the EU's implementati on of the GATT panel reports, Ecuador, 
Guatemala, Honduras, Mexico and the US filed a new complaint, under the WTO's dispute 
settlement system, against the EU’s banana import regime, which had been in force since July 
1993, claiming that it unfairly restricted  the entry of their bananas to the EU. 
 
In September 1997 , the WTO ruled that the EU’s banana import regime was inconsistent with 
WTO rules for the following reasons:  
a) the EU’s tariff quota allocation, particular ly to the ACP (African, Caribbean, Pacific) 
countries, was contrary to the rule of non-discriminatory administration of quotas 
(Article XIII of the GATT - General Agreement on Tariffs & Trade); 
b) the EU’s licensing procedures, which involve the purchase of EU and/or ACP bananas in 
order to obtain rights to import some Latin American (or other third countries’) 
bananas, were contrary to the MFN (most-favoured-nation) rule and the national treatment rule (Articles I & III respectively of the GATT); and 
c) through the impact of this licensing system on the service suppliers of the complaining 
countries, the licensing procedures were also contrary to the MFN rule and the national 
treatment rule (Articles II & XVII) of the GATS – General Agreement on Trade in Services. 
 
In January 1999 , the EU introduced a new banana import regime but in April 1999  the WTO 
ruled that this new regime was also incompatible with the EU’s WTO obligations.  
On 19 April 1999 , the WTO granted US authorization to impose sanctions upto an amount of 
US$191.4 million per year on EU products entering the US market.  
In May 2000 , the WTO granted Ecuador authorization to impose sanctions upto an amount of 
US$201.6 million per year on EU exports to Ecuador.  
In April 2001 , the three countries reached an agreement whereby Ecuador and the US would 
suspend their sanctions so long as the EU changed its banana import regime from the existing tariff-rate quota system to a tariff-only system  by 1 January 2006. Under this new tariff-only 
system, banana imports would not be subject to quotas; there would be a single tariff for all 
banana imports, except for ACP bananas which would continue to benefit from a preferential tariff arrangement but not from country-specific tariff quota shares. 
 
In order to change from a tariff-rate quota system to a tariff-only system, the EU has to modify all 
its existing WTO market-access commitments relating to bananas. Hence, under WTO rules (Article 
XXVIII of GATT), the EU has to re-negotiate with all countries which supply bananas on a non-
preferential basis to the EU and reach agreement on the details of the new tariff-only system. At 
the end of these negotiations, the share of the EU  market for these suppliers should be no less 
than before. 
 In November 2001 , at the WTO Ministerial Conference in Doha, Qatar, all member governments 
of the WTO adopted a Ministerial Decision which formalized the above elements of the agreement 
between Ecuador, the US and the EU. The Minister ial Decision also spelt out the procedures and 
timetable for possible arbitration in the event th e EU is unable to reach an agreement with the 
banana-supplying countries on the new tariff-only system. A related Ministerial Decision adopted 
at Doha allows ACP bananas to be imported into the EU tariff-free until 31 December 2007.  PRESS/591/Rev.1 
Page 4 of 7 
 
 
  On 31 January 2005 , after several months of consultations with non-preferential banana-
supplying countries, the EU informed the WTO of its new banana tariff: Euro 230/tonne. 
 In March/April 2005 , Brazil, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Nicaragua, 
Panama, and Venezuela requested arbitration under Doha Ministerial Decision. 
 In August 2005 , the arbitration panel ruled that EU’s proposed  Euro 230/tonne tariff would not 
maintain existing market-access for non-preferential banana suppliers in Latin America. 
 On 12 September 2005 , the EU proposed a revised ta riff of Euros 187/tonne. Further 
consultations were held among the parties but they were unable to reach a mutually-satisfactory 
solution.   
On 26 September 2005 , the EU requested a second arbitration, saying that, with the exception 
of a proposal for a zero tariff, the EU had not been presented with an alternative figure to its proposed tariff, and that there was no basis for seeking a mutually-satisfactory solution in the 
absence of a counter proposal from the other parties. Hence, the EU was requesting an arbitration 
to determine, within 30 days, whether the new EU proposal "has rectified the matter".  
On 27 October 2005 , the second arbitration report was issued. It determined that the EU's 
proposed rectification, consisting of a new MFN tariff of Euro 187/tonne and a 775,000 ton tariff quota on imports of bananas of ACP origin, would not result in "at least maintaining total market 
access for MFN banana suppliers". The arbitrator, therefore, concluded that the EU had failed to 
rectify the matter.  
On 29 November 2005 , the EU adopted new banana import measures which would come into 
effect on 1 January 2006. A new tariff for MFN bananas was set at Euros 176/tonne with a zero tariff for ACP bananas up to a level of 775,000 tons. 
 
On 30 November 2005 , Honduras, Panama and Nicaragua separately requested consultations 
with the EU under DSU Article 21.5. 
 
In December 2005 , at the Hong Kong Ministerial, several Latin American countries expressed 
serious concern over what they considered to be the EU's non-implementation of the WTO's rulings 
in the long-standing banana dispute, particularly in the light of the 2 arbitrations under the Doha 
Waiver. WTO DG Lamy, therefore, nominated Mr. Jonas Store, the Norwegian Trade Minister, as "Facilitator" to try to find a solution and asked him to report to the General Council accordingly. 
Minister Store conducted regular meetings under  a "good offices" process for more than 18 
months.  
On 28 November 2006 , Ecuador requested consultations with the EU under DSU Art 21.5, and a 
panel was established on  20 March 2007.  Panel composed on 15 June 2007 . On 10 December 
2007 , report issued to parties, and published on 7 April 2008 . The panel ruled that the duty-free 
tariff quota for bananas originating in ACP countries and the MFN tariff of Euros 176/tonne were in 
violation of Articles I, II, & XIII of GATT. Th e time period for adoption was extended to 29 August 
2008 . 
 
Colombia and Panama filed new disputes respectively on  21 March 2007 & 22 June 2007.  
 
On 12 July 2007 , the DSB established a compliance review panel under Article 21.5 of the DSU at 
the request of the US. The panel composed on 13 August 2007 .  The panel report was issued to  PRESS/591/Rev.1 
 Page 5 of 7 
 
 
  parties on 29 February 2008 , and published on 19 May 2008 . The panel ruled that the duty-
free tariff quota for bananas of ACP origin was in violation of Articles I & XIII of GATT. The time 
period for adoption was extended to 29 August 2008 . 
 
On 28 August 2008 , the EU appealed both panel reports. Both Appellate Body reports were 
published on 26 November 2008 , upholding the panels' findings. 
 
On 11 December 2008 , the DSB adopted the reports dealing with Ecuador's complaint. 
 On 22 December 2008 , the DSB adopted the reports dealing with the US' complaint. 
 
Since then, the EU has regularly reported to the DS B that it is engaged in discussions with Latin 
American banana-supplying countries to conclude a comprehensive agreement that would include 
the level of the new EU bound tariff duty. 
 Concurrently since November 2007 , at the request of some of the parties, the WTO Director-
General Pascal Lamy has been using his good  offices to help broker an agreement.  
 DG Lamy's Good Offices under DSU Art 3.12  
 
On 2 November 2007 , Colombia referred the matter to the Director-General, acting in an ex-
officio  capacity, to use his good office s to help facilitate a solution under Article 3.12 of the DSU. 
Panama similarly requested the DG's good offices on 1 February 2008.  
 Both processes agreed to adhere to confidentiality of content of proceedings with the aim of 
seeking a comprehensive solution that covered all outstanding banana issues in the WTO, including 
the six disputes filed under the DSU (DS16, DS27, DS105, DS158, DS361 & DS364), the two arbitrations under the Doha Waiver (WT/L/616 & WT/L/625), the EU enlargement/compensation 
negotiations under Articles XXIV and XXVIII of GA TT 1994, and the issue of non-recognition of 
negotiating rights raised at the Hong Kong Ministerial and discussed subsequently in the General Council (WT/MIN(05)/9, WT/GC/85, WT/G C/90 & Corr.1, and WT/GC/100).  
 
During the period November 2007 — July 2008 , the DG conducted several meetings under the 
Colombia/EU and the Panama/EU “good offices” processes. In addition, he had a number of 
meetings with other interested WTO members including other MFN suppliers, ACP banana 
producers, other banana producers and importers.  
During the last ten days of  July 2008 , several Ministers attended a meeting of the TNC in 
Geneva to participate in the Doha Round negotiations to reach an agreement on the modalities in agriculture and industrial products. As part of these larger Doha Round negotiations, 
consultations continued among the parties to seek a comprehensive solution of the banana issues. 
The TNC was unable to reach an agreement on the Doha Round modalities for agriculture and industrial products. No deal was reached on bananas either. 
 
Parties continued to work in search of a solution, until the announcement of a comprehensive agreement on Tuesday 15 December 2009 . 
  
  PRESS/591/Rev.1 
Page 6 of 7 Banana trade figures  
 
I. Developing economies1 exporters of bananas, 2005-2008        
(Million dollars and percentage)          
      Share in 
world  Annual percentage 
change  
 2005  2006 2007 2008  2005  2008  2007  2008  
            
World2 6317  6607 7483 8812  100  100  13  18  
Ecuador 1085  1214 1303 1639  17  19  7  26  
Costa Rica 490  648 702 712  8  8  8  1  
Colombia 506  511 558 644  8  7  9  15  
Philippines 363  404 397 398  6  5  -2  0  
Guatemala 262  233 325 344  4  4  39  6  
Honduras 136  132 154 171  2  2  17  11  
Cote d'Ivoire 94  116 127 118  1  1  9  -7  
Panama 96  106 110 97  2  1  4  -12  
Brazil 33  39 44 36  1  0  15  -20  
Mexico 24  31 20 48  0  1  -33  137  
Peru 18  27 31 46  0  1  16  45  
Above countries 3107  3459 3772 4252  49  48  9  13  
            Note: Bananas are defined as HS 0803: bananas, including plantains, fresh Or dried.  Based on available data, imports are better estimates for world trade in bananas as they include mirror data for non-reporting countries.  
World estimates exclude intra-EU27 trade. World imports are valued  CIF (include cost, insurance and freight) while exports are valued FOB (free on 
board), thus as the data are not adjusted for cif/fob factors, share of exporting countries are under-estimated. 
 
1Countries for which data are readily available 
2World imports: Based on sum of all importing countries for which data are readily available (exclude intra-EU27 trade) 
Source: UN Comtrade and Global Trade Atlas (GTA) 
  
   PRESS/591/Rev.1  
 Page 7 of 7II. World imports of bananas, 2005-2008         
(Million dollars and percentage)          
      Share in world   Annual percentage 
change 
 2005 2006  2007 2008  2005  2008   2007  2008 
            
World1 6317 6607  7483 8812  100  100   13  18 
EU27 Extra 3109 3217  3770 4338  49  49   17  15 
United States 1134 1201  1225 1373  18  16   2  12 
Japan 591 565  582 830  9  9   3  43 
Russia 449 482  587 671  7  8   22  14 
Canada 203 223  237 312  3  4   6  32 
Above countries 5486 5688  6400 7525  87  86   13  18 
            
M e m o r a n d u m  i t e m s :             World imports from ACP 644 716
 738 880  10  10   3  19 
World imports from Latin 
America 5102 5315  6114 7060  81  80   15  15 
            
EU27 extra+intra 
imports 5022 5007  5852 6886        
EU27 intra trade 1913 1789  2082 2547        
1World imports: Based on sum of all importing countries for which data are readily available (exclude intra-EU27 trade) 
Source: UN Comtrade and Global Trade Atlas (GTA) 
END