Bush’s team ‘more open’ to ending banana row with EU

Date: 18/01/01

By Simon Taylor

THE EU stands a better chance of ending its long-running banana dispute with the United States after the new administration takes over because George W. Bush's team is more open to the Union's favoured option, industry experts believe.

US trade officials made a last-minute bid to clinch a deal before Clinton's departure from the White House next week.

They tabled a new plan that would have given banana giant Chiquita a generous share of the EU's market in return for allowing the Union to operate a special quota that would safeguard the interests of vulnerable growers in African, Caribbean and Pacific countries.

US industry contacts say the offer, which would have handed the outgoing Clinton administration one final victory on the trade front, brought the two sides closer than ever before to settling the eight-year-old dispute.

But talks broke down after Washington refused to allow the EU to reserve a 20% share of the total domestic banana market for its own shippers and importers who would otherwise lose business.

Industry experts say the offer was a final attempt by the Clinton team to secure an agreement favourable to Chiquita, which this week warned it may file for bankruptcy.

The deal would have given the company a major slice of the EU banana market by basing the share-out of valuable import licences on past trading records. This would have come at the expense of Chiquita's rivals, such as Dole Foods, which have invested large sums in acquiring licences to win a stronger market position.

Industry sources predicted that the incoming Bush administration would be more open to the EU's plan for reform of its banana regime, which would allocate licences using a "first come, first served" system. This suits Chiquita's rivals because it would protect their position in the EU market. "Dole is happy to see the past performance system killed," said one expert.

The row over bananas has been one of the most damaging to the Union's relations with the US, as it led Washington to impose sanctions on €112 million worth of imports from the EU.

Optimism about the prospects for a deal have also been boosted this week with confirmation that Bob Zoellick, an experienced economic and foreign policy advisor, has been appointed to replace Charlene Barshefsky as the US trade representative.

Elmar Brok, German centre-right chairman of the European Parliament's influential foreign affairs committee, has welcomed Zoellick's nomination.

"Bob has excellent knowledge of Europe which will enable him to judge where the possibilities for compromise lie," Brok said. "He will be able to handle trade questions in the spirit of transatlantic relations, something which was not possible with Barshefsky."

The EU stands a better chance of ending its long-running banana dispute with the United States after the new administration takes over because George W. Bush's team is more open to the Union's favoured option, industry experts believe.