By Doug Palmer
WASHINGTON, Dec 20 (Reuters) - U.S. banana marketing giants Chiquita Brands International and Dole Food Co. are sharply divided on a new European Union plan to revamp the region's banana import licensing system.
In a statement, Chiquita said the "first-come, first-served" licensing regime which EU farm ministers approved on Tuesday violated World Trade Organization rules and would lead to another U.S. legal challenge.
But Dole took the opposite view, saying the new plan provided "clearer guidelines" for competing within the EU.
"The first-come, first-served system is a nondiscriminatory method for allocating import rights for Latin American bananas to the EU, which Dole supports," Dole President David DeLorenzo said in a statement.
U.S. Trade Representative Charlene Barshefsky has criticized the EU's new plan as "inconsistent" with WTO rules. With only one month left until the end of the Clinton administration, it could fall to her successor to decide whether to pursue new legal action against the EU.
In the meantime, the United States has made a counterproposal that would allocate access to the EU banana market based on a historical reference period.
Chiquita has been at the forefront of the banana dispute since July 1993, when EU rules restricting imports from Latin America went into effect.
The WTO ruled last year that the EU's system unfairly favored growers in EU territories and the Caribbean over Latin American producers, marketed by both Chiquita and Dole.
The WTO ruling prompted Washington to retaliate on $191 million a year on unrelated EU goods ranging from handbags to bed linen. The United States took the action after getting approval from the WTO.
Under the new EU system, which switches to a tariff-only approach in 2006, import licenses will be distributed as ships arrive at the port instead of a system that used previous distribution patterns to allocate new licenses.
"The 'first-come, first-served' system has been rejected by the African and Caribbean banana industries, the very sector the EU purports to support and protect," Chiquita President Steven Warshaw said.
The only lasting solution to the dispute is a "licensing system recognizing historical operators," he said.:
