Reuters | By Adrian Croft
BRUSSELS (Reuters) - The European Union and the United States have agreed to end a long-running dispute over bananas which will lead to the lifting of $191 million of U.S. sanctions on European goods in July, the EU said on Wednesday.
EU Trade Commissioner Pascal Lamy said agreement in principle had been reached with U.S. administration officials during the night.
"(EU Farm) Commissioner (Franz) Fischler and myself believe that after several years of difficult negotiations we have been able to strike a balance between all parties concerned," Lamy told a news conference.
The agreement must be endorsed by EU governments and the European Parliament but Lamy said he and Fischler would recommend "very warmly" that the EU should adopt the agreement.
The agreement will bring the suspension on July 1 of $191 million of sanctions which the United States imposed on a wide range of EU goods in 1999 after winning a World Trade Organization (WTO) ruling against the EU's banana import rules, the EU said.
Sanctions will be definitively ended once the agreement is fully implemented.
The sanctions, which angered EU governments and business, targeted a wide range of EU exports unconnected to the banana trade, ranging from cardboard packaging to lead-acid storage batteries.
Under the agreement, the EU will scrap its plans to introduce a "first come, first served" system of distributing banana licenses on July 1.
Instead, licenses will be allotted based on the way they were distributed during an "historical reference period" of 1994-96, EU officials said. There is no change to the Commission's plan to move to a tariff-only system from 2006.
Caribbean Growers Protected
Lamy said the agreement would guarantee a share of the market for African, Caribbean and Pacific (ACP) producers, whose interests the EU is keen to protect.
The EU and the United States have been at loggerheads for eight years over the EU's banana import rules.
Washington says the current rules favor growers in EU territories and former European colonies in the Caribbean over Latin American producers and U.S. marketing companies such as Chiquita Brands International and Dole Food Co.
The United States still has $117 million of sanctions in place on EU goods in another trade dispute over the EU's ban on the import of hormone-treated beef.
Another big trade dispute is festering over a U.S. system of tax breaks for exporters. The WTO is considering whether U.S. reforms to its Foreign Sales Corporation scheme comply with WTO rules.Reuters:
