Home - Yahoo! - Help

Yahoo! Games- play online chess, bridge, spades, backgammon

[ Business | US Market | By Industry | IPO | AP | S&P | International | PRNews | BizWire ]

Related Quotes ^DJI ^IXIC ^SPC ^IIX ^PSE 9358.83 2505.89 1279.64 795.27 515.04 +77.50 +28.55 +14.27 +7.59 +6.87 delayed 20 mins - disclaimer

FOCUS-Caribbean states block U.S. over bananas

By Robert Evans

GENEVA, Jan 25 (Reuters) - Two tiny Caribbean nations on Monday challenged the might of the United States in the World Trade Organisation (WTO), blocking a Washington bid for quick approval to slap sanctions on the European Union over bananas.

The move by the two, Dominica and St Lucia, threw a meeting of the WTO's Dispute Settlement Body (DSB) into uproar, and brought immediate charges from U.S. officials that the island states had been put up to their action by Brussels.

It also left a major question mark over how the increasingly bitter banana row between the two trade superpowers could be resolved, creating a clear crisis of authority for the four-year-old WTO itself, diplomats said.

``We felt strongly it was time for small nations to stand up for their rights when they feel they are under threat from the big countries in this body,'' declared an official from St Lucia, who declined to be named.

Dominica's ambassador George Williams told reporters the two countries, members of the 71-nation ACP group of former European colonies who have special access to the EU banana market, would need to be convinced that their concerns had been met before they changed their stance.

He said both would be looking for such assurances when the DSB was reconvened on Tuesday (eds: 0900 GMT) to try to find a way out of the impasse.

The surprise action -- in which the two were supported by fellow ACP member Ivory Coast -- came after three days of efforts by WTO chief Renato Ruggiero to get the United States and the EU to agree on a formula to end the crisis.

As they went into the DSB meeting, EU officials said there had been no deal, while U.S. representatives, earlier unhappy with a first version of Ruggiero's proposals, were signalling they were ready to go along with a second draft.

But before the session could get under way, first Dominica then St Lucia rose to say they could not give their approval to an agenda that included a U.S. request for a go-ahead to slap tariffs worth $520 million a year on EU goods.

Under WTO consensus rules, this meant the agenda -- which also included EU requests for three panels in other trade disputes -- was blocked and the meeting effectively aborted.

Williams said that if the U.S. request had been allowed to stand it would have made it possible for the United States and any other big WTO power to dictate unilaterally to small nations how to shape their trade policies.

``This is a matter of principle. It is a constitutional matter for the WTO,'' he declared.

He also rejected the charges, voiced by U.S. ambassador Rita Hayes, of collaboration with Brussels. ``I can state categorically that there was no consultation whatsoever with the EU. We acted entirely on our own,'' the Dominican envoy said.

EU ambassador Roderick Abbott also denied there had been any coordination with the two -- whose economies largely depend on banana exports and who say they would face disaster if they lost special access for exports of their fruit to European states.

``That's what they'd like you to believe, but they (the EU) joined in,'' a clearly angry Hayes said as she emerged from the meeting. ``The EU has to take responsibility for blocking the (dispute settlement) process.''

At the heart of the row is Brussels's new banana regime -- a set of arrangements covering the Union's 15 member states that favours EU-based marketing firms as well as bananas from the ACP countries over fruit produced in some Latin American countries, much of which is marketed by U.S. companies.

A WTO panel ruled in 1997 that the previous regime broke global trade agreements and had to be changed. The EU says its successor, in place since January 1, conforms to that ruling, but the United States says it does not and argues WTO dispute settlement accords give it the right to retaliate.