U.S. steps into Chiquita tiff

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The United States government is siding with Chiquita Brands International Inc. again in its 15-year battle against the European Union over access to its lucrative banana market.

U.S. Trade Representative Susan Schwab said Friday she would ask a World Trade Organization panel to investigate whether the current system, which favors bananas imported from former colonies in the Caribbean over those from Latin American countries, violates WTO rules.

"We share the concern of Ecuador and several other Latin American banana exporters regarding the continued existence of a discriminatory tariff rate quota in the EU's current banana regime," Schwab said in a statement.

Chiquita spokesman Mike Mitchell said the company viewed the intervention as a positive step.

"We certainly hope the USTR's action ... will continue to press the European Commission to resolve the situation very quickly," he said.

Chiquita has been fighting the European Union over its banana licensing system since the early 1990s. It's a fight especially important to Chiquita because the EU is its most profitable banana market, with companies able to charge higher prices there.

The original system imposed quotas limiting imports from Latin America. The U.S. intervened on Chiquita's behalf, imposing nearly $200 million in annual sanctions against European products after Chiquita said the quotas had cost it $1.5 billion in lost earnings.

The two sides cut a deal in 2001, with the EU committing to converting quotas to a tariff-only system by 2006. But the Europeans put heavy tariffs of 176 euros per ton on bananas from Latin America, Schwab's office said. According to Chiquita, those fees added $75 million in net costs last year, a major factor in the company's $96 million loss.

[News Source]

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