./.  WORLD TRADE  
ORGANIZATION  WT/L/607/Add.5 
1 April 2005 
 (05-1334) 
 Original:   English 
  
 
EUROPEAN COMMUNITIES – THE ACP-EC PARTNERSHIP AGREEMENT 
 
Recourse to Arbitration Pursuant to the Annex to the Decision of 14 November 2001
1 
 
Communication from Honduras 
 
Addendum  
   The following communication, dated 30 March 2005, is being circulated at the request of the 
Delegation of Honduras. 
 
_______________ 
 
  On 1 February 2005, the European Commun ities (“EC”) notified the WTO Members of its 
intention “to replace its concessions on item 08030019 (bananas) included in Schedule CXL of the 
European Communities annexed to the Genera l Agreement with a bound duty of 230€/t.” 
G/SECRET/22/Add. 1. That notification explained that the methodology used by the EC to “calculate” the proposed 230€/mt rate “is based on th e provisions of the Attachment to Annex V to 
the Agreement on Agriculture”.  It stated, too,  that the EC considers that G/SECRET/22/Add. 1 
“constitutes the announcement under the terms of the Annex to the Decision of the WTO Ministerial 
Conference of 14 November 2001 concer ning the ACP-EC Partnership Agreement 
(WT/MIN(01)/15)” (hereinafter “Waiver Annex” or , for the document in its entirety, “Waiver 
Decision”).   On 22 February 2005, the EC called to a meeting all WTO Members who consider 
themselves “interested parties under the [Waiver] Annex,” a phrase defined by the Waiver Annex to 
include any WTO Member “exporting to the EU on a MFN basis”.  According to the EC, that meeting was intended to satisfy the “consultations” require d under the second indent of the Waiver Annex. 
Honduras – as an “interested party” and exporter that  has formally claimed a substantial-supplying 
interest on bananas pursuant to GATT Article XXVI II – attended the meeting, along with other MFN 
banana suppliers. 
  The EC explained at the 22 February meeti ng that its 230€/mt figure had been derived by 
applying a “price-gap” methodology, as described in its document entitled “Bananas, Article XXVIII 
Negotiation Calculation of the Price Gap”  (EC Council Working Document, DS 829/04, 
6 December 2004).  No other methodology was put forward by the EC during that meeting.  
  Honduras and other MFN exporting countries attendi ng the meeting made clear that they did 
not consider the EC’s tariff-only “calculation” and r esulting 230€/mt tariff to be valid for a number of 
legal, economic, and factual reasons.  They made cl ear, too, that the EC on no occasion has explained 
how its proposed 230€/mt tariff, which represents more  than a tripling of the 75€/mt banana tariff now 
                                                     
 
1 WT/L/436 (also circulated as a Minister ial Conference document as WT/MIN(01)/15). WT/L/607/Add.5 
Page 2  
 
 applicable to all MFN bananas entering the EC, would satisfy all requirements of the Waiver 
Decision, including, but not limited to, the requireme nts of the Waiver Annex, that the new tariff 
result in “at least maintaining total market access  for MFN banana suppliers, taking into account” ... 
“all EC WTO market-access commitments relating to bananas”.   
 Since 22 February, the EC has still not come fo rward with an explanation of how its proposed 
230€/mt tariff would satisfy the funda mental requirements of the Waiver Annex, nor has it at any time 
during the 60-day process explained how a discrimin atory MFN tariff of that magnitude would be 
covered by paragraph 1 of the Waiver Decision, such  that the EC would be relieved of its obligations 
under GATT Article I, paragraph 1.  Both before and during the 60-day period, the EC has likewise 
failed to recognize Honduras’ leg itimate substantial-supplying in terest on bananas.  Although 
Honduras, in multiple exchanges with the EC, has pressed the EC to provide its reasons for not 
recognizing that claim, the EC has yet to do so.  Despite the EC’s unwillingness to be responsive to 
these and other relevant issues before and during th e 60-day consultation period, the EC nevertheless 
considers that it has properly fulfilled its obligatio ns under the second indent of the Waiver Annex. 
 
 Without prejudice to Honduras’ rights a nd interests under GATT Article XXVIII and the 
WTO Banana Reports
2, and to whether the EC has satisfied th e steps required before arbitration is 
invoked under the Waiver Annex, Honduras, as an “interested party,” hereby requests arbitration 
pursuant to the Waiver Annex to determine whet her the EC’s 230€/mt tariff proposal announced 
under the Waiver Annex and discussed with “interested  parties” fulfils all requirements of the Waiver 
Decision, including, but not limited to, paragraph 1,  paragraph 3bis, and the second and fourth indents 
of the Waiver Annex, such that the rights and obligations under GATT Article I, paragraph 1, are 
waived as to that tariff.  Honduras is requesting this arbitration because it considers that those 
requirements have not been satisfied.  
__________ 
 
 
                                                     
 
2 European Communities – Regime for the Importation, Sale, and Distribution of Bananas – Complaint 
by Guatemala and Honduras , Panel Report, WT/DS27/R, adopted 25 September 1997, as modified by the 
Appellate Body Report, WT/DS27/AB/R, DSR 1997:II.