European Communities—Regime for the Importation, Sale, and Distribution of Bananas
World Trade Organization, Appellate Body
WT/DS27/AB/R (September 25, 1997)

- Written by Josh Lee, JD
Facts
The European Communities (EC) (defendant) adopted a banana import regime that applied across the European Union. Under these new rules, bananas imported from 12 African, Caribbean, and Pacific (ACP) countries were given favorable treatment, including the ability to import a significant amount of bananas without any duty being assessed. Some of the favorable treatment was the result of the Lomé Convention, which was designed to benefit developing countries and former colonies. The 12 ACP countries were all former European colonies. The EC had obtained a waiver of the most-favored-nation principle to provide the exemptions from the duties to those countries. The waiver applied to the provisions of Paragraph 1 of Article I. Also, as part of the new rules, the EC adopted a complex tariff-rate quota system. This system provided for a lower rate for imports that were within the assigned quota amount and higher tariff rates for imports that went beyond the assigned quota amount. The EC allocated much higher quota amounts to the ACP countries than to other countries. The United States and several South American countries (plaintiffs) asserted that the tariff-rate quota system violated the General Agreement on Tariffs and Trade (GATT).
Rule of Law
Issue
Holding and Reasoning ()
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