European Union's Directorate General on Trade
PRESS RELEASE
Brussels
2 July 2001

The European Union on 2 July welcomed the United States' decision of 1 July 2001 to suspend the increased customs duties it imposed on certain EU exports in 1999 as a result of a long-running dispute over bananas. The decision means that increased (100% ad valorem) duties have now gone down to the level of ordinary customs duties on imports of EU products including bath oils, car batteries, bedlinen, handbags and wallets. Welcoming the move, European Trade Commissioner Pascal Lamy said:

'This is great news for European exporters. A whole cluster of products that had attracted prohibitive duties will once more be available to American consumers at normal prices. We solved this problem, and we showed that we can work together to manage trade disputes in a business-like manner. This is a very good signal at a time when we are working together on launching a New Round of global trade negotiations.' "Agriculture Commissioner Franz Fischler added "I am pleased that a solution has been reached under which these trade restricting sanctions no longer apply. This solution fully preserves the interests of EU producers and consumers as well as those of our ACP and Latin American suppliers."

The United States imposed increased (100% ad valorem) duties on imports of a variety of European products worth US$191.4 million on 19 April 1999 after the World Trade Organisation found against the EU in a dispute over EU restrictions on banana imports. The US and EU agreed on a means of resolving the dispute on 11 April 2001, as a result of which the increased duties will now be lifted. Normal rates will apply from now on.

Among specific sectors that suffered the most were bedlinen, bath products (for example UK company, The Body Shop, and French company, Le Laboratoire du Bain), folding cartons and boxes for luxury goods (e.g., German company, Carton Druc), lead acid batteries (e.g., Italian company FIAM), luxury handbags and wallets (e.g., French company, Louis Vuitton, and Italian company, Gucci), lithographs and coffee-making machines.

The EU welcomed the news not just on behalf of exporters who were directly affected by increased duties, but also on behalf of those whom the US had put on notice under the so-called 'carousel' legislation which would have allowed rotating increases of duties that could have affected exporters of cashmere sweaters or candles.

Background

The products subject to the increased duties were:

HTS Number	Product Description
33073050	Bath preparations, other than bath salts
42022215	Handbags, with or without shoulder straps or without handle, with outer surface of sheeting of plastics
42023210	Articles of a kind normally carried in the pocket or handbag, with outer surface of reinforced or laminated plastics
48055000	Uncoated felt paper and paperboard in rolls or sheets
48192000	Folding cartons, boxes and cases of noncorrugated paper or paperboard
49119120	Lithographs on paper or paperboard, not over 0.51 mm in thickness, printed not over 20 years at time of importation
63022190	Bed linen, not knit or crochet, printed, of cotton, not containing any embroidery, lace, braid, edging, trimming, piping or applique work, not napped
85072080	Lead-acid storage batteries other than of a kind used for starting piston engines or as the primary source of power for electric vehicles
85167100	Electrothermic coffee or tea makers, for domestic purposes

See IP/01/559, IP/01/562 and MEMO/01/135 of 11 April announcing agreement by the EU and US on agreement to solve the banana dispute.

See IP/01/628 on the introduction of the new EU banana import rigime.

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