./.  WORLD TRADE  
ORGANIZATION  WT/L/607/Add.7 
4 April 2005 
 (05-1345) 
 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 Nicaragua 
 
Addendum  
 
  The following communication, dated 31 March 2005, is being circulated at the request of the 
Delegation of Nicaragua. 
 
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  On 14 November 2001, the Ministerial Conference adopted the Decision of the ACP-EC 
Partnership Agreement (WT/MIN (01)/15, WT/L/436, herein referred to as the "Waiver Decision"), 
paragraph 1 of which provides:  
Subject to the terms and conditions set out hereunder, Article 1, paragraph 1 of the General Agreement shall be waived, until 
31 December 2007, to the extent necessary to permit the European 
Communities [the "EC"] to provide preferential tariff treatment for products originating in ACP States as required by Article 36.3, Annex V and its Protocols of the ACP-EC Partnership Agreement,* 
without being required to extend the Same preferential treatment to like products of any other member  (*footnote omitted). 
 
 The Waiver Decision likewise provides that with respect to bananas, the additional provisions 
in the Annex thereto shall apply. The Annex cont emplates arbitration proceedings to determine 
"whether the envisaged rebinding of the EC tariff on bananas would result in at least maintaining total 
market access for MFN banana s uppliers, taking into account the [EC's commitments specified in the 
Waiver Decision]";  that should it be determined that the envisaged rebinding does not so maintain 
and that the EC has failed to rectify the matter, the waiver shall cease to apply to bananas upon entry 
into force of the new EC tariff only regime on 1 January 2006.   On 1 February 2005, the European Commun ities ("EC") notified the WTO Members of its 
intention "to replace its concessions on item 080300 19 (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 the provision 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                                                      
 
1 WT/L/436 (also circulated as a Minister ial Conference document as WT/MIN(01)/15). WT/L/607/Add.7 
Page 2  
 
 14 November 2001 concerning the ACP-CE Partners hip Agreement (WT7MIN(01)/15)" (hereinafter 
"Wavier 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. 
  By letter of 14 March 2005, Nicaragua informed the EC that although it was unable to be present at the 22 February 2005 meeting due to a previously scheduled commitment, Nicaragua 
nevertheless considered itself an "interested party" as defined in the first indent of the Waiver Annex.  
The EC has not yet responded to that 14 March 20 05 letter, nor has it otherwise consulted with 
Nicaragua pursuant to the second indent of the Waiver Annex.   Thus, at no time during the 60-day consultati on process authorized by the Waiver Annex has 
the EC explained to Nicaragua either the precise methodology used to derive the 230€/mt figure, or 
how that proposed tariff, which represents more  than a tripling of the 75€/mt banana tariff now 
applicable to all MFN bananas entering the EC, would satisfy all requirements of the Waiver 
Decision, including but not limited to, the requirements of the Waiver Annex, that the new tariff result 
in "at least maintaining total marked access for MF N banana suppliers, taking  into account" "all EC 
WTO market-access commitments relating to bananas" .  The EC has neither explained during this 
time period how a discriminatory MFN tariff of that magnitude would be cove red by paragraph 1 of 
the Waiver Decision, such that the EC would be  relieved of its obligations under GATT Article 1, 
paragraph 1. Despite the fact that consultations w ith Nicaragua are still pending, the EC nevertheless 
considers that it has fulfilled its "consultation" obligations under the second indent of the Waiver 
Annex. 
 
 Without prejudice to whether the EC has satisfi ed the steps required before arbitration is 
invoked under the Waiver Annex, Nicaragua, 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 fulfils all requirements of the Waiver Decision, including, but not limited to, 
paragraph 1, paragraph 3b is, 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.  Nicaragua is 
requesting this arbitration because it considers th at those requirements have not been satisfied. 
  
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