EU loses battle in WTO "banana wars"

By Jonathan Lynn

GENEVA (Reuters) - The European Union is still breaking international trade rules with its import regime for bananas, the World Trade Organisation (WTO) said on Monday.

The ruling by a WTO panel, confirming a preliminary judgement made last November, shows that EU regulations are blocking access to the world's biggest banana market for fruit from Ecuador despite attempts by Brussels to reform them.

If upheld, the ruling would allow Ecuador to seek sanctions against the EU.

The EU's executive commission dismissed the panel report as "formalistic" and said it was considering an appeal.

But a senior Ecuadorean diplomat, noting this was now the seventh time that Brussels had been faulted in the dispute, said the WTO had agreed with all of Ecuador's arguments.

"It's a big victory for us," Cesar Montano Huerta of Ecuador's WTO mission, told Reuters. "But we are still hoping to come out with a solution and negotiations for this issue."

The "banana wars" are one of the longest-running and most complex international trade disputes, pre-dating the creation of the WTO in 1995.

EU producers in Spain's Canary Islands, the French overseas departments of Martinique and Guadeloupe and Portugal's Madeira and Azores provide about one fifth of EU consumers' bananas, and most of the rest come from Latin American growers.