The EC-Ecuador agreement provides Ecuadorian producers with a sizeable part of the 17 per cent of the market reserved for newcomers. The US has acted at the behest of Chiquita Brands International. Ecuador also acted more in the interests of major banana exporting companies like Noboa and Costa Trading rather than its farmers. The cost of sanctions may be higher for the developing country imposing them than for the target country of the sanctions. Losing the Ecuadorian market has a negligible impact on the European economy, but European markets are vital for Ecuador s exporters.
Sanctions have little chance of bringing about the desired change in trade policy.
This imbalance means that winning a dispute before the DSB can be meaningless for developing countries, leaving them unable to defend their trade rights. It was difficult for Ecuador as a small developing country with severe economic problems to resist major pressure from the US and the EC on the banana issue. Under the new scheme, the only Ecuadorian company to retain access to its license is Noboa, and it is still unclear whether another politically important operator, Costa Trading, will be able to export bananas into the EC market.