EUROPEAN COMMUNITIES – REGIME FOR THE IMPORTATION, SALE AND DISTRIBUTION OF BANANAS
Document: Recourse to Article 21.5 of the DSU
Date: 18 December 1998
Document codes: WT/DS27/41; WT/DS27/12; WT/DS27/R/ECU; WT/DS27/AB/R
Complainant: Ecuador, Guatemala, Honduras, Mexico, U.S.
Respondent: EU
Third parties: Belize, Cameroon, Canada, Colombia, Costa Rica, Dominica, Dominican, Ghana, Grenada, India, Jamaica, Japan, Mauritius, Nicaragua, Panama, Philippines, Saint Lucia, Saint Vincent and the Grenadines, Senegal, Suriname, Venezuela, Côte d’Ivoire, Brazil, Madagascar
Dispute stage: Mutually Agreed Solution
Agreements cited: Art. I, II, III, X, XI, XIII  GATT 1994Art. 1, 3  Import LicensingArt. II, XVI, XVII  Services (GATS)Art. 2  Trade-Related Investment Measures (TRIMs)Art. 19  Agriculture

EUROPEAN COMMUNITIES – REGIME FOR THE IMPORTATION,
SALE AND DISTRIBUTION OF BANANAS
Recourse to Article 21.5 of the DSU
The following communication, dated 18 December 1998, from the Permanent Mission of
Ecuador to the Chairman of the Dispute Settlement Body, is circulated in accordance with
Article 21.5 of the DSU.
On 25 September 1997, the Dispute Settlement Body adopted the Reports of the Panel and the
Appellate Body in "" (document ).
Reports and established the inconsistency of the
European Communities' banana regime with their obligations under the General Agreement on Tariffs
and Trade 1994, the General Agreement on Trade in Services and the Agreement on Import Licensing
Procedures.
Subsequently, on 23 December 1997, the Arbitrator appointed by the WTO Director-General
to set a reasonable period of time for the implementation of the recommendations and rulings of the
Panel and the Appellate Body concluded (document ) that the European Communities
should implement the recommendations and rulings of the Dispute Settlement Body within a period of
15 months and one week i.e. by 1 January 1999.
In July and October 1998, the European Communities adopted the following regulations
which, in Ecuador's view, are at odds with the basi c principles and multilateral rules governing the
 (WTO):
- Council Regulation (EC) No. 1637/98 of 20 July 1998 amending Regulation 404/93
on the common organization of the market in bananas, published in the Official
Journal of the European Communities OJ.1998.L 210 of 28 July 1998;
- Commission Regulation (EC) No. 2362/98 of 28 October 1998 laying down detailed
rules for the implementation of Council Regulation (EEC) No. 404/93 regarding
imports of bananas into the Community, published in Official Journal L 293 of
31 October 1998.
Since the Commission of the European Communities submitted its proposal in January 1998
to amend the contested banana regime, Ecuador has repeatedly stated its views, before the Dispute

Settlement Body and directly to the authorities of the Commission, regarding the inconsistency of the
proposed amendments with WTO regulations.1
Later on, when the amendments were adopted, Ecuador, acting jointly and severally with
other Members of the WTO, stated its disagreement therewith at the DSB meetings of 23 July,
22 September, 21 October and 25 November 1998, and expressed its conviction that this conflict
should be settled in conformity with Article 21.5 of the Understanding on Rules and Procedures
Governing the Settlement of Disputes (DSU), i.e. it should be brought before the Panel that originally
examined the case.
Ecuador, acting jointly and severally with the other complaining parties in the case, requested
consultations (document WT/DS27/18) on 18 August 1998, without prejudice to its rights under
Article 21.5 and on the understanding that the application of this Article would not assume or require
the holding of prior consultations.
The consultations were held on 17 September 1998, and resumed at the request of Ecuador on
23 November 1998. Neither these consultations nor the two additional meetings held on 6 August and
21 September 1998 under the auspices of the Chairman of the Dispute Settlement Body were able to
settle the differences and disagreements between the parties. This is not new for the European
Communities, and there are now sufficient elements to justify submitting the issue to the Panel that
originally heard the case. However, Ecuador reserves the right to raise other issues of law and fact in
the course of the procedure initiated.
For the above reasons, Ecuador requests the WTO Dispute Settlement Body, at today's
meeting, to call for the re-establishment of the Panel that originally heard the case in order to resolve
the conflict with the European Communities concerning the consistency of its measures to implement
the recommendations and rulings of the Dispute Settlement Body of 25 September 1997.
Ecuador requests that the Panel, in examining the regulations of the European Communities,
consider and verify whether its own recommendati ons and rulings and those of the Appellate Body
adopted by the Dispute Settlement Body on 25 September 1997 denouncing the inconsistencies with
the GATT 1994, the General Agreement on Trade in Services and the Agreement on Import Licensing
Procedures, have been effectively implemented by the European Communities, and if not, that it call
for the immediate amendment of the Community regulations without the right to another reasonable
period of time.
The Panel should also examine Council Regulation (EC) No. 1637/98 and Commission
Regulation (EC) No. 2362/98 and find that these measures are inconsistent with the European
Communities' obligations under the following provisions:
1. The General Agreement on Tariffs and Trade (GATT) 1994, and in particular,
although not necessarily exclusively:
- Article I of the GATT 1994, in that Regulation 1637/98 discriminates in
favour of traditional and non-traditional ACP bananas;
- Article II of the GATT 1994 as regards the creation of a tariff quota described
as an autonomous quota following the expansion of the Community market
through the accession of new members, violating their obligations, including
bindings offered in their Schedule of Concessions;

1 DSB meetings held in 1998: 22 January, 13 February, 25 March, 22 April, 22 June, 23 July,
22 September, 21 October and 25 November.

- Article XIII of the GATT 1994, which requires the non-discriminatory
administration of quantitative restrictions and stipulates that the parties
should aim at a distribution of trade in such product (bananas) approaching as
closely as possible the shares which the various parties might be expected to
obtain in the absence of such restrictions, particularly in establishing a quota
for bananas from the ACP countries;
- Paragraph 1 of Article XIII of the GATT 1994, which stipulates that no
restriction shall be applied on the importation of any products of the territory
of any other contracting party unless the importation of the like product of all
the third countries is similarly restricted;
- paragraph 2(d) of Article XIII of the GATT 1994, which establishes how a
quota should be allocated among supplying countries having a substantial
interest in supplying the product concerned;
- Paragraph 5 of Article XIII of the GATT 1994, which confirms the
mandatory application of the provisions of Article XIII to any tariff quota
instituted or maintained by any contracting party;
2. The General Agreement on Trade in Services (GATS), in particular, although not
necessarily exclusively:
- Article II, which lays down the obligation to accord to services and service
suppliers of any other Member treatment no less favourable than that
accorded to like services or service suppliers of any other country;
- Article XVII, and in particular paragraph 3, which lay down provisions for
granting national treatment to service suppliers of other Members and contain
comments regarding the modification of the conditions of competition in
favour of foreign services or service suppliers;
3. The Agreement on Import Licensing Pro cedures, in particular, although not
necessarily exclusively, Article 3 thereof.
Finally, Ecuador considers that it is necessary to invoke Article 19 of the Understanding on
Rules and Procedures Governing the Settlement of Disputes to ensure that the Panel, in addition to
issuing its rulings, suggests how the European Communities might implement its recommendations.