On Monday, April 8, 2008, the World Trade Organization ruled that the European Union's banana import regime was "inconsistent" with the rules of international trade. This decision refers to the exemption from customs duties on bananas granted to ACP (African, Caribbean and Pacific) countries exporting to the European market, while other countries, particularly Ecuador, do not benefit from the same conditions.
The ruling arose from a review sought in November 2006 by Ecuador, the leading exporter of bananas to the European Union, on the basis that the import regime enjoyed by the ACP countries did not allow Ecuador to maintain its share of the EU market.
The European Union, which is considering an appeal, was quick to react, claiming that the WTO panel had adopted a "largely academic" and "purely formalistic" approach. Michael Mann, the European Commission’s agriculture spokesman, declared that "the preference for ACP bananas (…) no longer exists as of January 1, 2008," based on negotiations related to the Economic Partnership Agreements (EPAs).
Since that date, although the EPAs do allow the ACP countries to export all of their products (except sugar and rice) to the European market without customs duties, they expect the ACP countries to gradually open 80% of their markets to European products in return. According to the European Union, this requirement proves that the new import regime complies with the rules of international trade, even if it still provides no solution to the sticky banana situation that Ecuador faces.
This new development demonstrates the shaky foundation of the strategy of open agricultural markets inspired by the WTO and illustrated by the EPAs: in the end, neither the ACP countries, the EU or Ecuador (and in a general sense, third countries) will benefit from the situation.