29 October 1998
EU-USA banana battle rumbles on

THE European Union is facing increasing trade friction with the USA after the European Commission approved licensing rules for bananas from next year.

The USA has already said it would seek permission from the World Trade Organisation (WTO) for trade retaliation against the revised banana regime, which it says, is not in line with a WTO ruling.

The USA and five Latin American countries say the new regime is as discriminatory as the existing system.

The EU banana import regime system gives indirect support to banana exporters signed up under the Lomé Convention, including African, Caribbean and Pacific (ACP) countries.

Under the revised regime, there will still be two main quotas, one for Latin American countries – which will attract a duty – and one for ACP countries, which will be tariff-free.

The Commission said it aimed to bring about a more open regime by reserving 8% of the market to newcomers against the existing 3.5%.