European Union's Directorate General on Trade
PRESS RELEASE
Brussels
30 April 2001

Today, the EU and Ecuador announced that they have reached an agreement today to resolve their long-standing dispute over bananas in the World Trade Organisation (WTO). It builds on intensive contacts between the European Commission and Ecuador in the last year, and on the understanding reached between the European Commission and the United States on 11 April. Welcoming the agreement, European Commissioner for Trade Pascal Lamy, European Commissioner for Agriculture Franz Fischler, and Ecuadorian Foreign Minister Heinz Moeller said: "This is a decisive step to put this saga to rest. It is a landmark result in that the European Commission and Ecuador, a developing country and the single largest exporter of bananas, have achieved this satisfactory outcome. It is now possible to say that the major parties to the long running banana dispute have been able to agree on a solution that represents a fair balance between the competing interests. These interests include the main supplier of bananas to the EU, the producers of bananas in the EU, the ACP countries -- and of course the European consumers. It is also a clear victory for the WTO as it helped resolving a difficult dispute between developing and developed countries."

The new regime will provide increased opportunities for Ecuadorian exports. It abolishes the EU's import break down on a country quota basis, increases the import volumes from Latin America by 100 000 tonnes, and improves market access to traditional and non traditional importers from Ecuador, following the WTO ruling on GATS. The new regime will hold for a transitional period through to the establishment of a tariff-only system by 2006.

The Understanding between the EU and Ecuador is fully compatible with the one reached between the EU and US earlier this month. On the one hand, major planks of the Understanding reached with the US draw directly from elements proposed by Ecuador in its consultations with the EU last year. On the other, the Understanding with Ecuador recognises Ecuador's rights as the principal supplier and sets out, in detail, the qualification and management provisions governing the "non traditional operators."

The new system is scheduled to take effect on July 1, 2001. The European Union will institute a system of licensing, based on historic reference periods from July 1, 2001. A very significant share of the trade will be reserved for non-traditional operators working within an open and competitive environment thus facilitating access for small and medium sized businesses. The European Commission will also initiate the necessary procedures to propose to the Council of Ministers an adjustment of the quantities in the various quotas, in order to expand access for Latin American bananas and to secure a market share for a specific quantity of bananas of ACP origin.

Ecuador has pledged to work actively to secure acceptance of the EU's request for the necessary WTO authorisation. A tariff-only system is scheduled to take effect on January 1, 2006. The European Union will begin negotiations with producing countries necessary under WTO rules in good time to introduce the tariff-only system from January 1, 2006.

The European Commission will now table the necessary proposals to the Council of Ministers and the European Parliament in order to fully implement the agreement as soon as possible.

Please see the European Union's Directorate General on Trade website for more information. europa.eu.int/comm/trade/miti/dispute/bana.htm