.  WORLD TRADE  
ORGANIZATION  WT/MIN(05)/25 
17 December 2005 
 (05-6097) 
MINISTERIAL CONFERENCE 
Sixth Session Hong Kong, 13 - 18 December 2005 Original:   Spanish 
 
  
EC COMPLIANCE WITH ALL MFN RIGHTS AND INTERESTS ON BANANAS  
UNDER THE DOHA MINISTERIAL DECISION OF 14 NOVEMBER 2001, 
THE AWARD OF ARBITRATOR OF  1 AUGUST 2005, THE AWARD OF 
ARBITRATOR OF 27 OCTOBER 2005, GATT ARTICLE XIII, 
GATT ARTICLE XXVIII AND ALL OTHER 
WTO OBLIGATIONS 
 
Statement by Colombia under Item 2(b) of the Agenda
 
 
 
 The following statement, made by the dele gation of Colombia under Agenda Item 2(b) on 
14 December 2005, is being circulated at the request of that delegation.  
_______________ 
 
  I should like to thank the delegation of H onduras for putting the issue of the European 
Union's treatment of bananas on the agenda of this Ministerial Conference.  The main purpose of this 
Conference is to make headway in the Devel opment Round, and bananas are a product of great 
importance to the development of Colombia's econom y.  The banana sector is a major generator of 
employment in rural areas and the sole means of s ubsistence in Urabá, a region afflicted by serious 
armed conflict in the past but which we have mana ged to pacify thanks to the stability created by 
banana growing.  Bananas are one of our main exports and the sector is one in which we are 
competitive.  Consequently, ensuri ng MFN access to foreign markets is a priority for our economic 
and social development.  Hence our participation in this agenda item. 
 
 The European Communities is one of the largest  Members of this Organization and one that 
we watch, not only because global agricultural reform  depends to a large exte nt on its decisions, but 
also because of its treatment of MFN bananas, i.e. bananas other than those produced in the 
Communities or ACP countries.  In its dealings wi th Latin America, the Communities has failed to 
honour several multilateral commitments regarding ba nanas, a matter we wish to place on record at 
this Conference, in our quest for a final settlement.   This agenda item comprises four sub-items:  (1) compliance with all rights and interests on bananas under the Doha Ministerial Decision of 14 November 2001;  (2) the Arbitration Awards of 
1 August 2005 and 27 October 2005;  (3) GATT Artic le XIII;  (4) GATT Article XXVIII and all other 
WTO obligations.   On sub-item (1), as regards compliance with the annex to the waiver adopted on 
14 November 2001 at the Doha Ministerial Conf erence and the understandings reached with the 
United States and Ecuador, the Communities has disr egarded its obligations and hence our rights.  
The Communities undertook to adopt a single tariff regime for the banana imports and at least to 
maintain total access to the European market for Latin American producers. 
 WT/MIN(05)/25 
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  Despite that undertaking, the Communities h as issued a decision establishing a new import 
regime.  It is not a single tariff regime, nor does it as a minimum maintain total access for our exports to the European Union market.  Quite simply because what it proposes is a mixed import system, 
which sets a single tariff of €176 per ton for impor ts from MFN banana suppliers, and a quota of 
775,000 tons at zero duty for the ACP countries. 
 
 As to the of €176 per ton tariff the Communiti es plans to apply to us, we have no idea where 
it came from.  Two weeks ago, the Europeans c ould have decided on €171, €173, €176 or €179 per 
ton, and in the end they chose €176, but we do not kn ow why.  We have held three meetings with the 
Commission but have still not been told where th e figure comes from.  The Communities is ignoring 
the fact that arbitration awards found against it,  a matter I shall turn to under the second subitem 
raised by Honduras.   What appeared to be a solution to this long st anding banana dispute was found in Doha:  if the 
single tariff proposed by the EC failed to at le ast maintain total market access for the Latin 
Americans, the latter could have recourse to a speci al dispute settlement procedure consisting of two 
rounds of arbitration.  Since the tariff originally proposed was €230 per ton, we resorted to arbitration 
and the first award found the EC to be in breach of the Doha Mandate. 
  The Commission consequently lowered the tariff to €187 per tonne and as a new proposal included a duty-free quota of 775,000 tonnes for the ACP countries, asserting that this did comply 
with its commitments.  The Commission itself f iled the second arbitration request, but again the 
finding was overwhelmingly against the EC.     In the meantime, before the second ruling was issued and ignoring the fact that a decision 
from the arbitrator was pending, the Commission submitted to the Membership a request for an 
Article XIII waiver to cover the quota it was estab lishing for the ACP countries.  The Membership 
was clearly not in a position to entertain the matter and declined to do so.  It  accordingly appears to us 
that the request should be dealt with by this Confer ence.  In Doha we believed that we had negotiated 
a non-discriminatory arrangement for Latin American  bananas.  Today, we feel frustration at a 
process that seemed to have brought us to the verge of a final settlement after twelve years of dispute 
but which in practice appears only to prolong the uncertainty. 
 
 The regime in question is obviously not a tariff only regime, and what the European Communities has announced is a mixed regime.  Th ere will be a MFN tariff and a duty-free quota for 
bananas of ACP origin.  
 Neither does the European Co mmunities meet its commitments under the Doha Ministerial 
Conference when it states that the declared tariff is autonomous.  That is to say, the EC does not 
intend to bind the tariff in spite of the fact that one of its Doha commitments was to conduct 
negotiations under Article XXVIII of the GATT in  relation to rebinding the tariff.   
  We are particularly frustrated, given that we negotiated the said Decision of 
14 November 2001 in good faith.  We granted a wa iver to enable transpar ency in the European 
market, where Latin America is effi cient and competitive, to improve within a few years.  However, 
we also took precautions in this respect, precautions which we intend to enforce.  The annex to the 
waiver states that if, at the end of the two arb itration proceedings it is found that the European 
Communities has not introduced a tariff resulting in at  least the maintenance of  total market access for 
MFN banana suppliers, the waiver which enables th e EC to grant preferential treatment to bananas 
from ACP countries shall cease to apply.   The European Communities now claims that, in sp ite of two arbitration awards against it, it 
has remedied the situation merely by lowering th e tariff contested in the most recent arbitration 
proceedings by 11 points, and that  the proposed scheme does at least maintain total market access for  WT/MIN(05)/25 
 Page 3 
 
 
 MFN banana suppliers.  It also contends that the ar bitrators gave no indication of how to calculate the 
tariff; we have shown it that the arbitrators did in deed point out how this was to be done and that, 
using the same statistical sources as the EC itself, th e tariff after the first ruling stood at €95.5 per ton 
and, after the second, at €92 per ton.  As you can appreciate, these tariff levels are far removed from 
those submitted by the European Co mmunities:  a difference of €80 per ton in the first instance and of 
€84 in the second, neither of which are inconsiderable amounts. 
  Finally, let me point out that Colombia and several other Latin American countries are 
engaged in three separate proceedings with the European Communities, a ll with the same cause of 
action namely improved access for our bananas to the European Union market.  The first concerns the 
above-mentioned single tariff and the second, the ne gotiations on the enlargement of the European 
Union to include ten new members, which affected us  dramatically, given that, prior to enlargement, 
our bananas entered the market of the new memb ers quota- and duty-free, whereas subsequent to 
enlargement they have to pay €75 per ton in-quota, i. e., their access was restri cted by being subjected 
to the complex regime of the Europe of 15.  Colombia sought compensation for the severe injury 
caused and requested preferential ac cess subject to zero duty for a limited banana quota.  We have 
made this request on many occasions and failed to re ceive a satisfactory answer.  Unbelievably, the 
European Communities made an oral statement last week to the effect that enlargement compensation 
was included in the new tariff of €176 per ton.   In counter-response, we have informed the European Communities that, by way of 
compensation, we seek the tariff reduction resu lting from the arbitration decisions, and we have 
calculated what must be recognized in terms of tariff  points.  Needless to say, if the scheme proposed 
by the European Union fails to reflect either comp liance with the arbitration awards or the amount it 
owes us in compensation, Colombia reserves all its rights under the WTO rules.  
 The third procedure concerns the Doha Deve lopment Round whereby, like all Members and 
as stated in the Ministerial mandate of November 2001, we aim to improve access for all the goods we 
export, including banana exports to the European Union market.   We hope that the European Communities understands  that there is still time for it to rectify 
this new historical error and thereby avoid both parties having to resort once again to the dispute 
settlement system over the very same product and the very same arbitrary behaviour.  Moreover, it is 
essential that we are able to rely both on the European Union as a trading partner which honours its 
commitments and on the WTO as an organization whic h enforces its own rules.  We therefore hope, 
that you will take action on this issue and we reite rate once again our readiness to reach a negotiated 
settlement. 
 
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