Podium: Europe started the `banana war'

From a speech by the US representative to the World Trade Organisation on the banana imports dispute

AS WE have announced, the US actions under discussion today ensure that the United States will be able to implement the arbitrators' decision. Our President addressed the issue over the weekend and I think his statement is appropriate for all of us today. The President said: "It's not really about bananas, it's about rules. We cannot maintain an open trading system, which is essential to global prosperity, unless we also have rules that are abided by."

This is the second time this year that the EC has requested a meeting of the General Council to claim that the US is acting outside the bounds of its World Trade Organisation (WTO) obligations. But let's take a moment to remember why we are really here.

As the President said, the reason is because the EC has failed to implement a WTO-consistent banana regime within a reasonable time. We wouldn't be here today if the EC had simply brought its bananas measures into conformity with its WTO obligations.

We also wouldn't be here today if the EC had shown some respect for the plain meaning and purpose of the WTO dispute settlement system. The real danger of undermining the WTO dispute settlement system lies in the European Commission. Unfortunately, the community hasn't got the message that it has to implement the results of dispute settlement proceedings even when it is not convenient for the community.

The EC has repeatedly claimed that its banana regime is consistent with its WTO obligations. If the EC is correct and is really convinced that the arbitrators will determine that no benefits accruing to the United States have been nullified or impaired by the regime, the EC should encourage its exporters to continue shipping to the United States.

The United States has said repeatedly that we will comply with the arbitrators' decision. We reaffirm that here today.

Therefore, if the EC's banana regime both is WTO-consistent and causes no nullification or impairment of US benefits, the EC can and should be confident that its goods will not be subjected to any increased duties at the time entries of the goods are liquidated. I would like to ask the EC about one of the concluding sentences in its communication to the General Council. The EC claims that "we have all invested too much in the new dispute settlement system to allow it to be destroyed by irresponsible unilateral action". I have to ask, "EC, what have you invested?"

The US has fully implemented three adverse Dispute Settlement Body recommendations, and is in the process of implementing a fourth. Members other than the EC have also implemented adverse DSB recommendations. But what has the EC done other than put itself outside the WTO dispute settlement system by refusing to implement a WTO-consistent banana regime, and attempting to abuse the procedures of the Dispute Settlement Understanding?

Some have asked why we have taken these steps now, and why we do not wait the two weeks or so until the arbitrators' report is due. Mr Chairman, we have waited seven years, as the EC has tweaked its system a bit here, a bit there and, when found non-compliant, has tweaked yet again.

Not only has the EC used every single delaying tactic available under the rules of the system, but it has also invented new gimmicks along the way - all as a result of its compulsion to stall for time.

The creativity and ingenuity shown by the EC in this endeavour have been impressive. The EC has also demonstrated that it is willing to take tremendous risks with the system. The energy that the EC representatives have shown themselves capable of, in this destructive enterprise, is something to wonder at. It is a pity that the EC could not have used all of this talent and energy to bear on developing a WTO-consistent regime that could resolve the banana dispute. If the EC had done so, Ambassador Abbott could have justifiably claimed that the EC, too, has made an investment in the dispute settlement system.

Finally, in closing I acknowledge Ambassador Abbott's comment that this is a serious matter. I also note his comment about "If the cap should fit..." I've raised three children and his remark about caps put me in mind of my reading of the well-known Dr Zeuss book, The Cat in the Hat.

The EC reminds me of the "Cat in the Hat" who delighted in leading others into mischief while escaping the consequences himself. It seems the EC, after its long history of evading its WTO obligations in this area, is uncomfortable that at the end of the day, it may be held accountable.