Associated Press
November 10, 2000
By Raf Casert

BRUSSELS, Belgium (AP) -- The European Commission is proposing changes in its controversial banana import system in an attempt to settle a dispute with the United States, Latin American producers and the World Trade Organization.

Following a heated debate at Commission headquarters, the EU's executive body proposed Wednesday to gradually work towards a system in which Latin American producers would get a bigger slice of the EU banana market.

"This is not an easy decision," said Bernhard Zepter, the Commission deputy secretary general after presenting the plan which calls for a transition period up to 2006 to change the EU's import system. The plan would change the import system from one based on tariffs and quotas, which is advantageous to its traditional suppliers, to a tariffs-only system.

Setting the length of the transition period "was a sticking point," Zepter said.

Because the plan still has to be assessed by the 15 EU member states and by the European parliament, it remained unclear to what extent it would help defuse the trans-Atlantic trade tensions. The EU foreign affairs ministers plan to discuss it Monday at a meeting in Brussels.

The EU's current system of tariffs and quotas has been ruled illegal four times at the WTO and in April the United States imposed almost $200 million a year in sanctions against EU goods.

Zepter admitted the trade dispute had divided EU member states with some seeking a more market-oriented solution which would provide cheaper bananas to consumers as soon as possible.

Other EU nations are also seeking a quick solution to end the sanctions against some market sensitive products. "It was a heated discussion," said Zepter.

The issue has clouded EU-U.S. trade relations for years and it is also likely to come during the Nov. 30-Dec. 3 launch of the new round of WTO-sponsored world trade negotiations.

But Zepter said no deal would be worked out before the end of the month. "Procedures in the European Union are always very lengthy and complicated," Zepter said. "But what we thought was necessary was to signal that we now want to act and not wait any longer."

EU producers France, Spain and Portugal have been outspoken maintaining the current system and have fought any changes that would reduce preferences to their producers. The EU has also preferential trade agreements with a host of African, Caribbean and Pacific nations to import bananas.

Any change in the system would hurt them too but be beneficial to Latin American producers.