Trade sanctions lifted in banana case

The administration of President George W. Bush on Sunday formally lifted trade sanctions the United States had imposed on $191 million worth of French handbags, British bed linens and other European products in a fight over European banana barriers.

US Trade Representative Robert Zoellick said the administration was satisfied with the steps the European Union had taken to implement an agreement the two sides had reached on April 11. That deal will begin to dismantle the barriers American banana companies found objectionable.

The action on Sunday means that $191 million worth of European products effectively barred from the US market because they faced 100 percent US tariffs will become available again.

Those products include bath preparations, handbags and wallets, felt paper and paperboard, paperboard boxes, lithographs, bed linens, batteries and coffee makers.

The Clinton administration imposed the duties after the EU refused to comply with a World Trade Organization ruling said that the EU's banana import barriers were inconsistent with WTO rules.

Zoellick, Bush's top trade negotiator, has made a priority of working toward a resolution of the long­running banana dispute and a separate fight over EU restrictions on US beef produced with growth hormones.

"This process represents a serious effort by the United States and the EU to manage our differences in a spirit of mutual respect," Zoellick said.

Under the banana settlement, Europe agreed to gradually increase its quotas for bananas grown in Latin America until 2006 when all preferential quotas would be eliminated.

The new European licensing system was to take effect Sunday. The administration said Sunday it was satisfied the system met the terms of the agreement.

Two big US companies ­ Chiquita Brands International Inc. and Dole Foods Co. ­ contended they had lost almost half of their European sales when the EU in 1993 implemented a new quota system that gave preferential treatment to bananas grown in former European colonies in the Caribbean and Africa.

The administration hopes that its success in resolving the banana fight will set the stage for compromise with Europe on an even bigger issue: a potential $4 billion in trade sanctions Europe could impose on American products in retaliation for US tax breaks awarded exporters that the WTO has ruled violate global trade rules.

Resolution of the banana case still leaves 100 percent tariffs on a different set of $116.8 million worth of European goods ranging from Danish ham to German chocolate, French mustard and Roquefort cheese.

This trade retaliation was imposed by the Clinton administration because of a European ban on American beef produced with growth hormones. American beef producers contend that the hormones are entirely safe and there is no scientific basis for banning American beef, a position that the WTO upheld.