EUROPEAN COMMUNITIES – REGIME FOR THE IMPORTATION, SALE AND DISTRIBUTION OF BANANAS
Document: Recourse to Article 21.5 of the DSU by the United States Request for the Establishment of a Panel
Date: 2 July 2007
Document codes: WT/DS27/83
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 by the United States

Request for the Establishment of a Panel

 The following communication, dated 29 June 2007, from the delegation of the United States
to the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 21.5 of the DSU.

On 25 September 1997, the Dispute Settlement Body ("DSB") adopted its recommendations
and rulings in the dispute (WT/DS27) (" Bananas III ").
1 The DSB ruled that the import regime of the European
Communities ("EC") for bananas was inconsis tent with the EC's obligations under the General
Agreement on Tariffs and Trade 1994 ("GATT 1994") and General Agreement on Trade in Services
("GATS"). Accordingly, the DSB recommended that the EC bring its measure into conformity with
those agreements.2 An arbitrator appointed under Article 21.3(c) of the Understanding on Rules and
Procedures Governing the Settlement of Disputes ("DSU") awarded the EC a "reasonable period of
time" until 1 January 1999, to do so.3

The EC failed to bring its import regime for bananas into compliance with its WTO
obligations by the end of the reasonable period of time, and the United States considers that the
regime remains inconsistent today, nearly a decade after the DSB made its original recommendations
and rulings. In particular, at the end of the reas onable period of time, the EC implemented a first set
of changes to the banana import regime – through Regulation (EC) No. 1637/98 4 and Regulation (EC)
No. 2362/985 – that were found to perpetuate a discr iminatory tariff-rate quota ("TRQ") system and
license-based system in breach of the GATT 1994 and the GATS.6

1 Dispute Settlement Body, Minutes of 25 September 1997 Meeting, WT/DSB/M/37 (circulated
4 November 1997).
2 See Dispute Settlement Body, Minutes of 25 September 1997 Meeting, WT/DSB/M/37 (circulated
4 November 1997); ,
WT/DS27/R/USA, para. 9.2 (22 May 1997); , WT/DS27/AB/R, para. 257 (9 September 1997).
3 ,
WT/DS27/15, para. 20 (7 January 1998).
4 Published in the Official Journal of the European Communities (OJEC) L 120 of 28 July 1998.
5 Published in the Official Journal of the European Communities (OJEC) L 293/32 of 31 October 1998.
6 These findings were made by both a panel established under Article 21.5 of the DSU at the request of
Ecuador as well as by an arbitrator appointed pursuant to Article 22.6 of the DSU to review a US request for
authorization to suspend concessions. See , WT/DS27/RW/ECU, paras. 6.160-6.163 (12 April 1999) and European Communities –

In November 1999, the EC announced a second atte mpt to reform its banana regime, which
was allegedly to comprise "a two-stage process, namely, after a transitional period during which a
tariff quota system would be applied with preferential access for ACP [(African, Caribbean and
Pacific)] countries, a flat tariff would be introduced."
7 The "transitional period" was to end no later
than January 1, 2006.

Although the United States reluctantly permitted this lengthy delay in compliance until the
end of the "transitional period," 8 the EC never performed the second of the steps in the "two-stage
process." Instead of adopting a "flat tariff" fo r bananas, on 29 November 2005, the EC adopted
Regulation (EC) No. 1964/2005, which establishes a preferential (zero-duty) TRQ available only to
bananas originating in African, Caribbean and Pacific ("ACP") countries. 9 Bananas of other origins
have no access to this 775,000 ton TRQ. Under Regulation (EC) No. 1964/2005 such other bananas
are subject instead to a duty of 176 euros/ton.10 The regulation took effect as of 1 January 2006.

The United States considers that the EC has failed to implement the DSB's recommendations
and rulings, including through the changes made to its banana regime on 1 January 2006. Therefore,
the regime remains inconsistent with the EC's WTO obligations. The United States considers,
inter alia, that the EC's banana import regime:

(1) is inconsistent with Article I of the GATT 1994 because it applies a zero tariff rate to
imports of bananas originating in ACP count ries in a quantity up to 775,000 tons but
does not accord the same duty-free treatment to imports of bananas originating in all
other WTO Members; and

(2) is inconsistent with Article XIII of the GATT 1994 – including Articles XIII:1 and
XIII:2 – because it reserves the 775,000 t on zero-duty TRQ for imports of bananas
originating in ACP countries and provid es no access to this preferential TRQ to
imports of bananas originating in non-ACP substantial or non-s ubstantial supplying
countries.

The United States understands the measures th rough which the EC maintains its current
import regime for bananas to include:

• Regulation (EEC) 404/93 of 13 February 1993, as amended by Regulation
(EC) 216/2001 of 29 January 2001;

• Regulation (EC) No. 1964/2005 of 29 November 2005; and

Regime for the Importation, Sale and Distribution of Bananas, WT/DS27/ARB, paras. 5.96-5.98 (9 April 1999),
respectively. The DSB adopted the report of the Article 21.5 panel on 6 May 1999, including, again, a
recommendation that the EC bring its banana import regime into conformity with its obligations under the
GATT 1994 and the GATS. See Dispute Settlement Body, Minutes of 6 May 1999 Meeting, WT/DSB/M/61
(circulated 30 June 1999) and European Communities – Regime for the Importation, Sale and Distribution of
7 Minutes of Meeting of the Dispute Settlement Body held on 19 November 1999, WT/DSB/M/71
(11 January 2000).
8 In April 2001, the EC memorialized its "two stage" compliance proposal in separate understandings
with the United States and Ecuador.
9 Regulation (EC) No. 1964/2005, para. 2, published in the Official Journal of the European
Communities (OJEC) L 316/1 of 12 December 2005 ("[e]ach year from 1 January, starting from 1 January 2006,
an autonomous tariff quota of 775 000 tonnes net weight subject to a zero-duty rate shall be opened for imports
of bananas (CN code 0803 00 19) originating in ACP countries.")
10 Regulation (EC) No. 1964/2005, para. 1, published in the Official Journal of the European
Communities (OJEC) L 316/1 of 12 December 2005.

• for each of the regulations listed above, any amendments, implementing measures,
and other related measures.

As there is "disagreement as to the existence or consistency with a covered agreement of
measures taken to comply with the recommendati ons and rulings" of the DSB between the United
States and the EC, the United States respectfully seek s recourse to Article 21.5 of the DSU in this
matter. The United States requests that the DSB refe r the matter to the original panel, if possible,
pursuant to Article 21.5 of the DSU.