EUROPEAN COMMUNITIES – REGIME FOR THE IMPORTATION OF BANANAS
Document: Request for Consultations by Colombia
Date: 26 March 2007
Document codes: WT/DS361/1; G/L/818
Complainant: Colombia
Respondent: EU
Dispute stage: Consultation
Agreements cited: Art. I:1, II:1, XIII  GATT 1994

EUROPEAN COMMUNITIES – REGIME FOR THE IMPORTATION OF BANANAS

Request for Consultations by Colombia

 The following communication, dated 21 March 2007, from the delegation of Colombia to the
delegation of the European Communities and to th e Chairman of the Dispute Settlement Body, is
circulated in accordance with Article 4.4 of the DSU.

 My authorities have instructed me to requ est the European Communities ("EC") to consult
with Colombia pursuant to Article 4 of the U nderstanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU"), Article XXIII:1 of the General Agreement on Tariffs and Trade 1994
("GATT 1994"), and Paragraph 3 of the Understanding in Respect of Waivers of Obligations under
the General Agreement on Tariffs and Trade 1994 on th e regime for the importation of bananas that
the EC has applied since 1 January 2006.

Background to the consultations requested by Colombia

 In the dispute EC – Bananas III , certain aspects of the EC's previous banana import regime
were found to be inconsistent with WTO law.
1 The EC reached Unde rstandings with Ecuador 2 and
the United States 3 identifying means for the resolution of that dispute. According to these
Understandings, the EC was to "introduce a Tariff On ly regime for imports of bananas no later than
1 January 2006", 4 to rebind its import tariff on bananas, and to initiate "GATT Article XXVIII
negotiations ... in good time to that effect …" 5

 Both Understandings provided for the a pplication of three tariff-rate quotas
until 31 December 2005, including a zero duty tariff-ra te quota for bananas originating in ACP States
("ACP bananas") up to an annual quantity of 750,000 tonnes. 6 To enable the EC to accord this tariff-

1 See Panel Report, European Communities – Regime for th e Importation, Sale and Distribution of
Bananas, Complaint by Ecuador, WT/DS27/R/ECU, adopted 25 September 1997, as modified by the Appellate
Body Report, WT/DS27/AB/R; Panel Report, European Communities – Regime for the Importation, Sale and
Distribution of Bananas – Recourse to Article 21.5 of the DSU by Ecuador , WT/DS27/RW/ECU, adopted
6 May 1999; and Decision by the Arbitrators, European Communities – Regime for the Importation, Sale and
Distribution of Bananas – Recourse to Arbitration by the European Communities under Article 22.6 of the DSU,
WT/DS27/ARB/ECU, 24 March 2000.
2 As contained in the document " European Communities – Regime for the Importation, Sale and
Distribution of Bananas, Understanding on Bananas between Ecuador and the EC", WT/DS27/60, G/C/W/274.
3 As contained in the document " European Communities – Regime for the Importation, Sale and
Distribution of Bananas, Communication from the United States", WT/DS27/59, G/C/W/270.
5 WT/DS27/60, para. B.
6 WT/DS27/59 and WT/DS27/60, Annex II, para. 3.

rate quota, the EC was granted a waiver from Articles XIII:1 and XIII:2 of the GATT 1994 until
31 December 2005 (the "Article XIII Doha Waiver").
7 Furthermore, to enable the EC to provide
preferential tariff treatment to products of ACP or igin, as required by Article 36.3, Annex V and its
Protocols of the ACP-EC Partnership Agreement, th e EC was granted a waiver from Article I of the
GATT 1994 until 31 December 2007 (the "Article I Doha Waiver").8

 In respect of bananas, the application of th e Article I Doha Waiver beyond 31 December 2005
was made subject to a number of terms and conditions. The waiver specified that the EC shall rebind
its import tariff on bananas at a level that "would resu lt in at least maintaining total market access for
MFN banana suppliers".
9 It further provided for "multilateral control on the implementation of this
commitment"10 through a two-stage arbitration procedure a nd specified that both the "Article XXVIII
negotiations and the arbitration procedures shall be concluded before the entry into force of the new
EC tariff only regime on 1 January 2006."11

 In a communication dated 31 January 2005, the EC stated that it envisaged rebinding its
import tariff for bananas at the level of 230€/tonne. 12 Following the receipt of this communication,
Colombia and other MFN banana suppliers (the "Interested Parties") initiated the arbitration
procedure contemplated in the Article I Doha Wa iver. The Arbitrator determined that the EC's
"envisaged rebinding [of 230€/tonne] would not result in at least maintaining total market access for
MFN banana suppliers, taking into account all EC WTO market-access commitments relating to
bananas".13

 The Article I Doha Waiver required the EC to "rectify the matter" if the Arbitrator were to
find that the rebinding initially pr oposed would not result in at least maintaining total market access
for MFN banana suppliers.
14 On 13 September 2005, the EC notified the Interested Parties that it
intended to rectify the matter by setting its import tariff for bananas at the level of 187€/tonne and
establishing a zero duty tariff-rate quota of 775,000 tonn es per year for ACP bananas. Subsequently,
the EC initiated the second stage of the arbitration procedure to determine whether its proposal would
at least maintain total market access for MFN banana suppliers. Once again, the Arbitrator
determined that the EC proposal failed that standa rd and that, consequently, the EC had "failed to
rectify the matter, in accordance with the fifth tiret of the Annex to the Doha Waiver."15 On 1 January
2006, the EC implemented a new regime for the im portation of bananas under which the tariff levied
on bananas of MFN origin ("MFN bananas") wa s set at 176€/tonne, and ACP bananas may be
imported at zero duty up to an annual quantity of 775,000 tonnes (the "ACP TRQ").

Measure at issue and legal basis of Colombia's complaint

 The measure at issue is the EC's the new im port regime for bananas set out in (i) Council
Regulation (EC) No 1964/2005 of 29 November 2005 on the tariff rates for bananas and

7 As contained in document " European Communities – Transitional Regime for the EC Autonomous
Tariff Rate Quotas on Imports of Bananas, Decision of 14 November 2001", WT/MIN(01)/16.
8 8 As contained in the document "European Communities – The ACP-EC Partnership Agreement,
Decision of 14 November 2001", WT/MIN(01)/15.
9 Article I Doha Waiver, 11th preambular paragraph.
10 Ibid.
11 Annex to the Article I Doha Waiver, 5th tiret.
12 G/SECRET/22/Add.1.
13 Award of the Arbitrator, European Communities- The ACP-EC Partnership Agreement- Recourse to
Arbitration pursuant to the Decision of 14 November 2001,WT/L/616, 1 August 2005, para. 94.
14 Annex to the Article I Doha Waiver, 5th tiret.
15 Award of the Arbitrator, European Communities- The ACP-EC Partnership Agreement- Second
Recourse to Arbitration pursuant to the Decision of 14 November 2001, WT/L/625, 27 October 2005, para. 127.

(ii) Commission Regulation (EC) No 2014/2005 of 9 December 2005, as amended by Commission
Regulation (EC) No 566/2006 of 6 April 2006, on licences under the arrangements for importing
bananas into the Community in respect of banan as released into free circulation at the common
customs tariff rate of duty, and (iii) all other lega l instruments implementing, relating to, or amending
any of the foregoing.

 Colombia considers that the new import regi me for bananas is inconsistent with the
GATT 1994 for the following reasons:

1. The application of a tariff of 176€/tonne to imports of MFN bananas is inconsistent with
Article II:1 of the GATT 1994 because it is in excess of the duties set forth under heading
08030019
16 of the EC's Schedule of Concessions. That schedule provides for an in-quota
duty of 75€/tonne within a tariff-rate quota of 2.2 million tonnes. The levying of import tariffs
in excess of 75€/tonne for all imports of MFN bananas is inc onsistent with this concession.
For this reason, before applying to MFN ba nanas a tariff higher than 75€/tonne, the EC
should have renegotiated its ta riff concession on bananas in accordance with the procedures
set out in Article XXVIII of the GATT 1994, as ag reed to in its Understandings with Ecuador
and the United States, and as contemplated under the Article I Doha Waiver.

2. Only ACP bananas benefit from the application of a zero tariff. The denial of this advantage
to MFN bananas is inconsistent with Article I:1 of the GATT 1994. This inconsistency cannot
be justified under the Article I Doha Waiver b ecause that waiver ceased to apply to bananas
as of 1 January 2006, given the Arbitrator's dete rmination that the EC had failed to rectify the
matter. In any case, the EC cannot invoke this waiver to justify the inconsistency with Article
I:1 of the GATT 1994 because it does not observe the terms and conditions of the waiver. In
particular, it has failed to rebind its import tariff on bananas and at a level that results in at
least maintaining total market access for MFN banana suppliers, taking into account all EC
WTO market-access commitments.

3. The application of the ACP TRQ entails discrimination between ACP bananas and MFN
bananas inconsistent with Articles XIII:1, XIII:2, and XIII:5 of the GATT 1994. This
inconsistency cannot be justif ied under the Article XIII Doha Waiver because that waiver
expired on 31 December 2005 and has not been extended.
17

Procedural Aspects

 The Understanding between the EC and Ecua dor, the EC and the United States, and the
Article I Doha Waiver envisaged a final resolutio n of a long-standing dispute by 1 January 2006.
Regrettably, the EC has once again taken measures in consistent with WTO law that seriously harm an
important sector of Colombia's economy. As a de veloping country heavily dependent on its exports
of bananas, Colombia can ill-afford yet anothe r lengthy dispute settlement proceeding conducted
according to standard time frames. Accordingly, Colombia requests the EC to hold consultations
within the time frame set out in Article 4.8 of the DSU for cases of urgency, that is within 10 days
after the date of receipt of this request. S hould these consultations not lead to a satisfactory
settlement, Colombia will consider referring the matter to the Director General pursuant to
Article 3.12 of the DSU and the Decision of 5 April 1966 (BISD 14S/18) in the hope that his good

16 Bananas are classified under heading 08030019 in CN 99 and under heading 0803 00 12 in
Schedule CXL.
17 The EC had submitted a request for an extension of this waiver (see "Request for the extension of
Waiver under GATT Article XIII – Tariff Rate Qu ota for Bananas of ACP origin", G/C/W/529,
11 October 2005). However, that request has not been approved.

offices will facilitate a rapid solution to this disput e and, if necessary, request the establishment of a
panel in accordance with applicable accelerated procedures.

 I look forward to receiving your reply to this request for consultations. I suggest that the
precise date of the consultations be discussed between our missions.