07-4341. WTO Dispute Settlement Proceeding Regarding European Communities-Regime for the Importation, Sale and Distribution of Bananas: Recourse by the United States to Article 21.5 of the DSU

AGENCY:

Office of the United States Trade Representative.

ACTION:

Notice; request for comments.

SUMMARY:

The Office of the United States Trade Representative (“USTR”) is providing notice that at the request of the United States, the Dispute Settlement Body (“DSB”) of the World Trade Organization (“WTO”), has established a dispute settlement panel under the Marrakesh Agreement establishing the WTO to examine whether the European Communities (“EC”) has implemented the recommendations and rulings of the DSB in a dispute regarding the EC's import regime for bananas. The request may be found at http://www.wto.org contained in a document designated at WT/DS27/83 (see also the similar request by Ecuador in the document WT/DS27/80). The DSB adopted the findings of the panel and Appellate Body in this proceeding on September 25, 1997. The DSB ruled that the EC's import regime for bananas was inconsistent with the EC's obligations under the General Agreement on Tariffs and Trade 1994 (GATT 1994) and the General Agreement on Trade in Services (“GATS”). An arbitrator appointed under Article 21.3 of the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (“DSU”) awarded the EC a “reasonable period of time” in which to come into compliance until January 1, 1999. Nearly a decade after the DSB made its original recommendations and rulings, the United States considers that the EC has failed to bring its import regime for bananas into compliance with its WTO obligation. USTR invites written comments from the public concerning the issues raised in this dispute.

DATES:

Although USTR will accept any comments received during the course of the dispute, comments should be submitted on or before September 21, 2007 to be assured of timely consideration by USTR.

ADDRESSES:

Comments should be submitted (i) electronically, to [e-mail], with “EC Bananas (DS27)” in the subject line, or (ii) by fax, to Sandy McKinzy at [phone], with a confirmation copy sent electronically to the electronic mail address above, in accordance with the requirements for submissions set out below.

FOR FURTHER INFORMATION CONTACT:

María L. Pagán, Associate General Counsel, Office of the United States Trade Representative, 600 17th Street, NW., Washington, DC 20508, [phone].

SUPPLEMENTARY INFORMATION:

USTR is providing notice that the United States has requested the establishment of a WTO dispute settlement compliance panel pursuant to the DSU. The Article 21.5 panel, which will hold its meetings in Geneva, Switzerland, is expected to issue a report on its findings and recommendations by February 29, 2008.

Prior WTO Proceedings

On September 25, 1997, the DSB adopted its recommendations and rulings in a dispute brought by the United States, Ecuador, Guatemala, Honduras, and Mexico challenging the EC's then existing import regime for bananas. The DSB ruled that the EC's import regime for bananas was inconsistent with the EC's obligations under the General Agreement on Tariffs and Trade 1994 (GATT 1994) and the General Agreement on Trade in Services (GATS). An arbitrator appointed under Article 21.3 of the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) awarded the EC a “reasonable period of time” in which to come into compliance until January 1, 1999. At the end of the reasonable period of time, the EC implemented a first set of changes to the import regime for bananas that were found to perpetuate a discriminatory tariff-rate quota (“TRQ”) system and license-based system in breach of the GATT 1994 and the GATS. In November 1999, the EC announced a second attempt to reform its banana regime, which would comprise a two-stage process involving a transition period during which a TRQ system would be applied with preferential access for African, Caribbean and Pacific (ACP) countries, after which a tariff-only regime would be introduced. The transition period was to end no later than January 1, 2006. This two-stage proposal was memorialized in separate understandings reached with the United States and Ecuador in April 2001. Documents related to this longstanding dispute are available in the USTR reading room and on the WTO Web site, http://www.wto.org.

Article 21.5 Proceeding

On January 1, 2006, the EC implemented a new import regime for bananas which consists of: (1) A zero-duty, 775,000 ton TRQ available only to bananas originating in ACP countries; and (2) an MFN duty of 176 euros per ton for all other bananas.

The United States considers that the EC has failed to implement the DSB's recommendations and rulings and that the EC's regime remains inconsistent with its WTO obligations. The United States considers that the EC's current import regime for bananas is:

(1) Inconsistent with Article I of the GATT 1994 because it applies a zero-duty TRQ to imports of bananas originating in ACP countries in a quantity up to 775,000 tons but does not accord the same duty-free treatment to imports of bananas originating in all other WTO Members; and

(2) Inconsistent with Article XIII of the GATT 1994—including Article XIII:1 and XIII:2—because it reserves the 775,000 ton zero-duty TRQ for imports of bananas originating in ACP countries but does not provide access to this preferential TRQ to imports of bananas originating in non-ACP substantial or non-substantial supplying countries.

Public Comment: Requirements for Submissions

Interested persons are invited to submit written comments concerning the issues raised in the dispute. Comments should be submitted (i) electronically, to [e-mail], with “EC Bananas (DS27)” in the subject line, or (i) by fax, to Sandy McKinzy at [phone], with a confirmation copy sent electronically to the electronic mail address above.

USTR encourages the submission of documents in Adobe PDF format as attachments to an electronic mail. Interested persons who make submissions by electronic mail should not provide separate cover letters; information that might appear in a cover letter should be included in the submission itself. Similarly, to the extent possible, any attachments to the submission should be included in the same file as the submission itself, and not as separate files.

Comments must be in English. A person requesting that information contained in a comment submitted by that person be treated as confidential business information must certify that such information is business confidential and would not customarily be released to the public by the commenter. Confidential business information must be clearly designated as such and “BUSINESS CONFIDENTIAL” must be marked at the top and bottom of the cover page and each succeeding page. Persons who submit confidential business information are encouraged to also provide a non-confidential summary of the information.

Information or advice contained in a comment submitted, other than business confidential information, may be determine by USTR to be confidential in accordance with section 135(g)(2) of the Trade Act of 1974 (19 U.S.C. 2155(g)(2)). If the submitter believes that information or advice may qualify as such, the submitter—

(1) Must clearly so designate the information or advice;

(2) Must clearly mark the material as “SUBMITTED IN CONFIDENCE” at the top and bottom of the cover page and each succeeding page; and

(3) Is encouraged to provide a non-confidential summary of the information or advice.

Pursuant to section 127(e) of the URAA (19 U.S.C. 3537(e)), USTR will maintain a file on this dispute settlement proceeding, accessible to the public, in the USTR Reading Room, which is located at 1724 F Street, NW., Washington, DC 20508. The public file will include non-confidential comments received by USTR from the public with respect to the dispute; if a dispute settlement panel is convened or in the event of an appeal from such a panel, the U.S. submissions, the submissions, or non-confidential summaries of submissions, received from other participants in the dispute; the report of the panel and, if applicable, the report of the Appellate Body. The USTR Reading Room is open to the public, by appointment only, from 10 a.m. to noon and 1 p.m. to 4 p.m., Monday through Friday. An appointment to review the public file (Docket WTO/DS-27, EC Bananas Dispute) may be made by calling the USTR Reading Room at [phone].

Daniel E. Brinza,

Assistant United States Trade Representative for Monitoring and Enforcement.