By Jennifer M. Freedman

Aug. 28 (Bloomberg) -- The European Union will appeal World Trade Organization rulings that the EU's banana import policies break global rules, calling the findings ``largely obsolete.''

WTO judges said in April that EU policies remained in violation of trade rules, backing a complaint by Ecuador, which supplies a quarter of the 27-nation bloc's banana imports. Judges found that EU policy, which has been declared illegal by the WTO a half-dozen times, still unfairly discriminates against producers from Ecuador, Costa Rica and Colombia. WTO judges have also ruled against the EU in a case brought by the U.S.

The EU applies a duty of 176 euros ($276) a metric ton on shipments of bananas from Latin America, while importing the fruit from former colonies in Africa and the Caribbean without a surcharge. Between January 2006 and March 2007, the bloc's imposition of the tariff cost Ecuador $131 million in extra duties, the Latin American nation has said.

``Despite the fact that the panel reports are largely obsolete as the EU preferential tariff rate quota for ACP bananas, which was the main issue examined by the panel, expired at the end of last year, the commission has decided to challenge the panel finding,'' the European Commission, the EU's trade authority, said today in a statement from Brussels.

The decision to appeal was made after efforts to negotiate a settlement collapsed during broader WTO negotiations in July that also failed.

Doha Round

``The proposal on bananas made in Geneva was made in the context of the Doha Round'' of global trade talks, the commission said. ``The failure to reach agreement in Geneva on the Doha Round also meant no agreement was reached on bananas.''

The EU is basing its challenge to the WTO judgments on two points. The panel ``completely disregarded'' evidence showing that Latin American banana suppliers' access to the bloc rose more than 10 percent, according to the commission, which said it also had ``significant systemic concerns'' about judges' interpretation and application of relevant WTO provisions.

The EU buys 3.4 million tons of its 4 million-ton annual total from Latin America.

The WTO first ruled against the EU in September 1997, backing claims brought by Ecuador, the U.S., Guatemala, Honduras and Mexico almost two years earlier. The EU promised to shift to a tariff-only regime for bananas no later than Jan. 1, 2006, in return for which the U.S. ended $191 million of sanctions on European goods in 2001.

The WTO has authorized Ecuador to take action against the EU for its failure to implement the 1997 rulings.

Interim Agreements

Judges in April agreed with Ecuador, where 10 percent of the population depends on bananas for their livelihood, that the EU hasn't honored interim agreements or complied with past WTO rulings. Bananas are the world's fourth most-valuable food crop, after wheat, rice and corn, according to the United Nations.

In February, WTO judges, siding with a U.S. complaint, said the EU ignored previous rulings to end its restrictions on banana imports from Latin America. The U.S. is backing the interests of Cincinnati-based Chiquita Brands International Inc. and Westlake Village, California-based Dole Food Co., which grow and export bananas from Latin America.

To contact the reporter on this story: Jennifer M. Freedman in Geneva at jfreedman@bloomberg.netLast Updated: August 28, 2008 11:34 EDT

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