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EC – BANANAS III1

(DS27)

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1. MEASURE AND PRODUCT AT ISSUE

•M easure at issue: The European Communities' regime for the importation, distribution and sale of bananas, introduced on 1 July 1993 and established by EEC Council Regulation 404/93.

•Product at issue:Bananas imported from third countries.2

2. SUMMARY OF KEY PANEL/AB FINDINGS

• GATT Art. XIII (non-discriminatory administration of quantitative restrictions): The Appellate Body upheld the Panel's finding that the allocation of tariff quota shares to some Members not having a substantial interest in supplying

bananas, but not to others, was inconsistent with Art. XIII:1. The Appellate Body also agreed with the Panel that the

BFA tariff quota reallocation rules3, under which a portion of a tariff quota share not used by one BFA country could

be reallocated exclusively to other BFA countries, were inconsistent with Arts. XIII:1 and XIII:2, chapeau.

• Lomé Waiver: The Appellate Body reversed the Panel's finding and found that the Lomé Waiver does not apply to

(i.e. exempt) violations of GATT Art. XIII given that the Waiver refers only to Art. I:1 and that waivers must be narrowly

interpreted and be subject to “strict disciplines”.

• GATT Art. I (most-favoured-nation treatment): The Appellate Body upheld the Panel's finding that the activity function rules, which applied only to licence allocation rules for imports from other than traditional ACP countries,

were inconsistent with Art. I:1. The Appellate Body also agreed with the Panel that the EC export certificate

requirement accorded an advantage to some Members only, i.e. the BFA countries, in violation of Art. I:1. In an issue

not appealed to the Appellate Body, the Panel found that tariff preferences for ACP countries were inconsistent with

Art. I:1, but that they were justified by the Lomé Waiver.

• GATT Art. III:4 (national treatment – domestic laws and regulations): The Appellate Body agreed with the Panel that the EC procedures and requirements for the distribution of licences for importing bananas from non-

traditional ACP suppliers were inconsistent with Art. III:4.

• GATT Art. X:3(a) (trade regulations – uniform, impartial and reasonable administration) and Licensing Agreement Art. 1.3 (neutral application and fair and equitable administration of rules): The Appellate Body

reversed the Panel's findings of violations of GATT Art. X:3(a) and Licensing Agreement Art. 1.3, on the grounds that

these provisions applied only to the administrative procedures for rules, not the rules themselves.

• GATS Arts. II (most-favoured-nation treatment) and XVII (national treatment): The Appellate Body upheld the Panel's finding that the EC measures were inconsistent with Arts. II and XVII because they were discriminatory, and

clarified that the “aim and effect” of a measure is irrelevant under Arts. II and XVII.

3. OTHER ISSUES

• Private counsel: The Appellate Body ruled that private lawyers may appear on behalf of a government during an Appellate Body oral hearing. (c.f. the Panel did not allow them.)

1European Communities – Regime for the Importation, Sale and Distribution of Bananas

2 Third countries are those countries other than (i) 12 African, Caribbean and Pacific (“ACP”) countries who have traditionally exported

bananas to the European Communities and (ii) ACP countries that were not traditional suppliers of the EC market.

3 The Framework Agreement on Bananas (“BFA”).

14

WTO Dispute Settlement: One-Page Case Summaries

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