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EU makes new proposals to break banana deadlock
BRUSSELS. July 7: The European Union's executive body, admitting that months of efforts to settle a trade row over bananas had hit a dead end. pul forward new proposals yesterday to try to achieve a break-through, reports Reuters.
But US trade officials said the proposals fell short and would only delay settlement of the trans-Atlantic dispute.
The European Commission has been struggling to come up with a banana import systems that complies with global trade rules after the World Trade Organisation (WTO) last year ruled against its current system.
The WTO sided with Latin American countries and the United States, which argued that current EU rules favoured EU territories and former Euro-pean colonies in the Caribbean over Latin American exporters and US marketing companies such as Chiquita Brands International Inc. COB.N and Dole Food Co. DOL.N Inc.
EU Farm Commissioner Franz Fischler said on Wednesday he hoped the Commission's new proposals would "breathe new life into the process.”
The EU Is under pressure to I solve the dispute because the
United Stales has imposed $191 million of sanctions on EU goods in retaliation for the banana spat and Ecuador, the world's leading banana exporter. has also been authorised by the WTO to slap $201.6 million of sanctions on EU goods.
EU Trade Commissioner Pascal Lamy denied that the new proposals were in any way connected to US plans to rotate products hit by its sanctions In the near future.
Last November, the Commission proposed that the EU move to a tariff-only banana import system by .January 1. 2006 after a transitional period Involving a complex tariff rate quota system.
But, despite Intense discussions with the United States and other trading partners, the EU has not been able to come up with a way to divide up the quota that satisfies all concerned.
Under the new proposals, the Commission will still push for a transitional system of tariff quotas, but they would be allotted on a "first come, first served" basis. A tariff-only system would take effect In 2006. as proposed before.
Under a "first come, first served" system, licences to im-poit bananas would be awarded — within certain quotas — to operators who were in a position to bring their bananas into the European market first.
However, the Commission said that if no agreement could be reached on the "first come, first served" basis by mid-Octo-ber, it planned to start negotiations on a tariff-only system."
France has strongly opposed a tariff-only system, saying it would Jeopardise producing regions such as the French West Indian island of Guadeloupe.
The Commission will detail its proposals to EU foreign ministers at a meeting on July 10 when It will seek authorisation from EU governments for Ils strategy.
Lamy said the Commission would consult the United States and other interested parties on its new proposals.
But Washington said there was little new about the EU's approach. "What we're looking at Is further analysis and further study of a number ol proposals which have been on the table for many months." said Greg Frazier, special US negotiator lor agriculture.