WORLD TRADE  
ORGANIZATION  WT/DS361/2 
WT/DS364/2 22 December 2009 
 
 
(09-6682) 
  
  
 
EC
1 – REGIME FOR THE IMPORTATION OF BANANAS (DS361) INITIATED  
BY COLOMBIA 
 
EC1 – REGIME FOR THE IMPORTATION OF BANANAS (DS364) INITIATED  
BY PANAMA 
 
Report by the Director-General on the Use of His Good Offices  
in the Above-Mentioned Disputes  
(pursuant to Article 3.12 of the DSU)  
 
 
 The following communication, dated 21 Dece mber 2009, from the Director-General of the 
WTO to the Chairman of the Dispute Settlement Body, is circulated to Members for their information. 
 
_______________ 
  
1. This is my report to the Dispute Settlement  Body (DSB) concerning the use of the good 
offices of the WTO Director-General in the above-m entioned disputes pursuant to Article 3.12 of the 
DSU and the Procedures under Article XXIII – Decision of 5 April 1966. As the parties have recently 
agreed on a way to settle these disputes, the use of  my good offices as WTO Director-General in these 
disputes is no longer needed and resort to such go od offices for this purpose is therefore deemed to 
have ended. 
Introduction 
 
2. In the dispute EC-Bananas III
2, certain aspects of the European Communities banana import 
regime in force at the time the dispute was initiated in 1996 were  found to be inconsistent with WTO 
law.  A number of proposals by the EC to modify  its regime to bring it into compliance with the 
recommendations and rulings of the Dispute Settle ment Body in this dispute were rejected by 
complaining countries.  In April 2001, an agreemen t was  reached between the EC, Ecuador and the 
United States that entailed , inter alia,   the establishment by no later than 1 January 2006 by the EC of 
a tariff-only import regime for bananas as well as an  interim arrangement consisting of: (1) a tariff 
rate quota scheme for MFN suppliers providing for an  in quota tariff rate of 75 euros per tonne up to 
2.2 million tons and an out of quota tariff rate of  680 euros per tonne thereafter; and (2) duty-free 
preferential tariff treatment to bananas for up to 750,000 tonnes originating in ACP countries.  This 
interim arrangement would be made legally pe rmissible under WTO rules through the adoption of 
several waivers agreed at the Doha Ministerial, as explained further below. 
                                                      
1 On 1 December 2009, the Treaty of Lisbon amendi ng the Treaty on Europe an Union and the Treaty 
establishing the European Community (done at Lisbon , 13 December 2007) entere d into force.  On 29 
November 2009, the WTO received a Verbal Note (WT/L/7 79) from the Council of th e European Union and the 
Commission of the European Communities stating that, by virtue of the Treaty of Lisbon, as of 1 December 2009, the European Union replaces an d succeeds the European Community. 
2 European Communities — Regime for the Importation, Sale and Distribution of Bananas , WT/DS27 WT/DS361/2 
WT/DS364/2 Page 2 
 
 
  3. A waiver from the application of Article  I of the GATT was granted in Doha in 
November 2001 (the "Doha waiver") for the Cot onou Agreement trade prefer ence, with a duration 
commensurate with these trade preferences, i.e., until 31 December  2007. This waiver also covered 
the trade preference for ba nanas.  The waiver specified that the European Communities would rebind 
its WTO-bound import tariff of 680 euros per tonne on ba nanas at a level that "would result in at least 
maintaining total market access for MFN banana s uppliers" comparable to that provided for under the 
interim arrangement. The waiver further provided for multilateral control ove r the implementation of 
this commitment through a two-stage arbitration pr ocedure and specified that both the Article XXVIII 
negotiations and the arbitration procedures would have to be concluded before the entry into force of 
the new EC tariff-only regime.  At  the same time, a second waiver to cover the temporary duty-free 
allocation of 750,000 tonnes to ACP countri es was granted until 31 December 2005. 
4. During the course of 2005, the European Communities and interested MFN countries 
attempted but failed to reach agreem ent on the level of a new EC tariff rate that would maintain the 
MFN countries' "total market access" as set forth in the Doha waiver.  Two arb itrations were held in 
accordance with the provisions of this waiver. Th ese arbitrations concluded that the tariff levels 
proposed by the European Communities would not r esult in at least maintaining total market access 
for MFN banana suppliers comparable to that unde r the interim arrangement, taking into account all 
EC WTO market access commitments relating to bana nas.  The EC was therefore required to rectify 
the matter. 
5. In response to the second ar bitration award and without the prior agreement of MFN 
suppliers, the EC implemented a new banana import regime on 1 January 2006 (through Council 
Regulation 1964/2005).  This was the EC banana regime in force when  there was a subsequent request 
by several of the MFN suppliers for the DG to pr ovide his good offices in this dispute as explained 
further below. Under this new EC regime, the MFN tariff applied to all bananas regardless of their 
origin was € 176 per ton and there were no quantita tive restrictions.  In addition, the European 
Communities offered until the end of 2007 a preferen ce to bananas imported from countries that had 
signed the "Cotonou Agreement"
3.   This preference took the form of an annual quota of 775,000 
tonnes of bananas free of duty from Cotonou particip ating countries (the "Cotonou Preference").  All 
bananas imported from Cotonou countries beyond this amount were also subject to the tariff of € 176 
per ton. 
6. In the meantime, at the Hong Kong Ministeria l in December 2005, several Latin American 
countries had expressed serious concern over wh at they considered to be the EU's 
non-implementation of the earlier WT O's legal rulings and recomme ndations from the late 1990s in 
the banana dispute, particularly in the aftermath of the two arbitrations carried out earlier in 2005 
under the Doha Waiver. To address these concerns, I nominated Mr Jonas Store, the Norwegian 
Foreign Minister, to act as a "Facilitator" to assist the parties in trying to find a solution and asked him 
to report to the General Council in due course.  Mini ster Store conducted regular  meetings for the next 
18 months, assisting the parties and reporting peri odically to the General Council on his efforts. 
During this process, the participants collected and shared data on imports/exports of bananas in the 
EU with a view to advancing the search for what s hould be the appropriate new EC tariff level within 
the framework of the agreements that had been reached in 2001. 
7. Concurrently, implementation of the EC's new import regime for bananas on 1 January 2006  
also triggered a number of  legal complaints in  the WTO by various MFN suppliers in late 2006, 
including legal proceedings initiated by Ecuador  and the United States under the compliance panel 
                                                      
3 The Cotonou Agreement obliged  the European Comm unities to accept the im portation of products 
originating from Cotonou beneficiary developing countries free of custom duties and charges having equivalent 
effect or, at least, at preferen tial terms, until 31 December 2007.  WT/DS361/2 
 WT/DS364/2 
 Page 3 
 
 
  procedures of Article 21.5 (c) of the DSU.  Th e reports of the two compliance panels and the 
Appellate Body in these two proceedings, wh ich were adopted by the DSB in late 20084, confirmed 
that the new EC regime on banana introduced on 1 January 2006 was still inc onsistent with the EU's 
WTO obligations. 
Use of the Good Offices of the WTO Director-General  
 
8. On 21 March and 22 June 2007, Colombia and Panama, respectively, requested new 
consultations under the DSU with the EC regarding its new banana regime of 1 January 2006 as set 
out in EC Council regulation (EC) No. 1964/20055.  When these consultations failed to lead to a 
satisfactory settlement, pursuant to Article 3.12 of  the DSU and the Procedures under Article XXIII – 
Decision of 5 April 1966, Colombia and Panama , referred the matter to me on 2 November and 
14 December 2007, respectively, with the request that, acting in my ex-officio capacity, I use my 
good offices with a view to facilitating a solution to their dispute with the EC. 
9. Initially, Colombia and the EC had requested that their good offices process not include any 
third parties. They foresaw, however, that if they  were to make progress, subsequent phases of the 
process could then involve other principal suppliers  and parties in the dispute. In the meantime, 
however, Panama requested me to carry out a separ ate good offices procedure for its dispute with the 
EC.  Colombia, Panama, and the EC then agreed that the two good offices procedures should run in 
parallel, although it was envisaged that at a later stage the two processes could be merged if there 
were sufficient progress toward  a solution in both processes. 
10. As this was the first time that the provisions  of Article 3.12 of the DSU and the Procedures 
under Article XXIII – Decision of 5 April 1966 were used since the inception of the WTO, I initially 
sought from the parties their expectations as to wh at should result from the good offices process.  In 
this regard and in accordance with paragraph 2 of  the 1966 procedures, parties were requested to 
furnish me with all relevant information relating to  the matter, including written explanations.  I also 
requested the parties' views on which other Memb ers or inter-governmental organisations they 
believed appropriate for me to c onsult with a view to promoting a mutually acceptable solution. 
11. The parties stated their preference for a ne gotiated settlement as opposed to a purely legal 
process. The parties also agreed in both good offi ces processes to adhere to confidentiality with 
respect to the content of the proceedings.  It was in  this spirit that the two good offices processes were 
conducted. 
12. I held four formal meetings in the Colo mbia-EC good offices process.  There were also 
several informal bilateral/plurilateral meetings a nd contacts between the parties and the parties and 
myself.  I also held two formal  meetings in  the Panama-EC process, with several informal 
bilateral/plurilateral contacts and meetings between the par ties and the parties and myself.6  During 
these two processes, with a view to assisting the par ties in recording in text their apparent points of 
agreement and possible agreement, I put forward a series of written options as to what might be 
considered by the parties as an acceptable EC im port tariff for bananas and under what conditions.   
                                                      
4 See See EC – Bananas III (Article 21.5 – Ecuador II),  WT/DS27/RW2/ECU and  
WT/DS27AB/RW2/ECU adopted on 11 December 2008; and EC – Bananas III (Article 21.5 – US) , 
WT/DS27/RW/USA, and WT/DS27/AB/RW/USA an d Corr.1,adopted on 22 December 2008. 
5 Colombia's request for consultation available in documents WT/DS361/1 and G/L/818.  Panama's 
request  is available in documents WT/DS364/1 and G/L/822. 
6 Formal meetings of the Colombia-EC good offices were held on 6/12/2007; 17/01/2008; 4/02/2008; 
and, 7/02/2008.  Formal meetings of the Panama-EC good offices were held on 26/02/2008 and 10/03/2008. WT/DS361/2 
WT/DS364/2 Page 4 
 
 
  13. In parallel to these two formal good offices process es, and in the interest of transparency - 
which could contribute to an agreement among th e parties that would be acceptable to all WTO 
Members – I also held a number of formal
7 and informal meetings with other WTO Members, 
including other MFN suppliers, ACP banana pr oducers, other banana producers and importers.8   
14. The good offices processes intensified in the first pa rt of July 2008.  In attempting to reflect 
the evolving positions of the parties and in an effort to lead them towards a ba lanced result, I then put 
forward in writing the elements of a draft compre hensive banana agreement on 12 July 2009.  I 
informed the parties that these elements were my be st effort at helping them  find a solution to their 
disputes.  I reiterated that I remained ava ilable should the parties need my assistance. 
15. Consultations then continued directly between the parties during the latter half of July 2008 
and through 2009.  These direct consu ltations finally resulted in two agreements between the EC and 
its MFN bananas suppliers – one with all Latin MFN suppliers and the other with the United States.  
These two agreements were initialled by the parties on  15 December 2009.  The text of the agreement 
between the EC and its Latin MFN suppliers - the "Geneva Agreement on Trade in Bananas" was then 
circulated to the General Council for its in formation (WT/L/784).  At its meeting of 
17-18 December 2009, the General Counc il took note of this agreement. 
 
__________ 
 
                                                      
7 Three formal meetings were held with a group of ACP countries on 14/05/2008; 26/06/2008; and, 
09/07/2008.  A meeting was also held with a group of MFN suppliers/producers/importers on 9/July/2008. 
8 Countries involved in these consultations were: China, Costa Rica, Ecuador , Guatemala, Honduras, 
India, Indonesia, Malaysia, Nicaragua, Peru, Philippines, Thailand, United States and Vietnam.  On occasions I 
held informal meetings with representatives of the ACPs , including with Amb Hiwat from Suriname, as head of 
the ACP working group on bananas.