Sir, - As lead Adviser in a consortium of legal firms advising the ACP states in the current WTO banana dispute, we would like to correct a number of inaccuracies in your Editorial of March 9th.
1. In relation to the US sanctions, you state that there is "a certain amount of bluff and bluster in the US threat". The US has not merely threatened sanctions, it has actually imposed them and importers of the affected goods must now put up a bond for the 100 per cent tariff penalty. Since the individual traders have no idea as to the eventual outcome of this trade dispute, this bond is an immediate cost and has an immediate effect on imports.
2. You suggested that the report from Sir Leon Brittan declaring the US measures to be "unacceptable and unlawful" is also a bluff and bluster. This is incorrect. The US sanctions are unlawful. There is no provision in the WTO Dispute Settlement Understanding authorising the US to impose sanctions in the circumstances that have occurred. Not even the US has been able to point to a provision authorising the actions now taken. Thus, the unlawfulness of the US action is unambiguous.
3. You state that the European Banana Regime was "modified slightly after an 1997 WTO ruling". The regime was radically changed. Each of the issues criticised by the appellate body was removed:
the 30 per cent transfer of licences from traditional Latin American importers to those which imported the more costly Caribbean fruit was completely removed;
the award of licences to ripeners was removed;
the award of hurricane licences to assist countries hit by unforeseeable climatic disasters was removed;
the special allocation to individual ACP States was removed.
All the issues challenged in the previous hearing were addressed and the import regime radically overhauled. The changes have weakened the protection afforded the ACP banana producers.
4. Your Editorial points out that the regime still discriminates in favour of British and French colonies. This is correct. However, all countries represented at the World Trade Organisation voted unanimously to give a waiver from Article 1 for such discrimination. Even the US voted in favour of this waiver.
5. You state that Brussels is also vulnerable to the charge that it has dragged its feet on the issue and that it was reluctant, until recently, to allow arbitration. A majority of the members of the WTO also thought that resort to sanctions was incorrect in the circumstances where the EU had radically changed the regime. The Dispute Settlement Understanding specifically provides that where a regime has been changed and there is doubt if it has gone sufficiently far in compliance with a panel ruling, the dispute is to be sent back to the same panel to rule on its legality. The US has not chosen this provision. It has instead sought to go to arbitration to assess damages for a regime that has not even been found incompatible. Even worse, it has refused to await the ruling of the arbitrators, and imposed illegal sanctions.
6. You correctly point out how grave the concern must be that a company such as Chiquita wields so much clout in Washington. That one huge US multinational should use its clout in Washington to damage such vulnerable democracies as those of the Caribbean banana producing states which depend for their very existence on bananas is, I agree, a matter of great concern. - Yours, etc., Philip Lee,
Solicitor, Lee McEvoy, Arran Square, Dublin 7.