AJOT Digital Edition
Issue #583 | Forest Products

Cover of issue-583.png

Forest Products

View Issue #583 Now!

2014 Media Kit
  • Share this article:

EU court rejects damages claims in WTO banana case

By: | at 08:00 PM | Channel(s): International Trade  

Europe’s top court rejected appeals by two Italian companies that wanted EU compensation for export revenue lost after Washington imposed sanctions on a wide range of goods over Europe’s banana policy.

Recalling the specter of the 1990s “banana wars” that Europe lost at the hands of United States and Ecuador, the world’s largest banana exporter, the companies’ complaint dates back to a World Trade Organization (WTO) case from nearly 10 years ago.

That case ended up with the United States gaining WTO approval to slap $191 million a year worth of retaliatory duties on a string of EU goods in 1999. They were lifted in 2001 after the EU agreed to change its quota system of banana imports.

The duties hit goods ranging from coffee makers and cardboard boxes to batteries, bed linen and luxury handbags.

They were imposed in retaliation for what Washington said were unfair trade preferences given by the European Union for banana imports from a group of former European colonies.

In its judgment, the European Court of Justice (ECJ) upheld an earlier ruling by a lower EU court issued in 2006 that the EU should not compensate companies for any losses they incurred as a result of the increased US import tariffs.

“The (European) Community cannot be called upon to make good damage resulting from a failure of its institutions to comply with the WTO agreements,” it said in a statement.

While the US itself does not export bananas, three of the largest banana distributors with plantations in Latin America are US multinationals—Chiquita Brands International, Del Monte Foods Co and Dole Food Co.

Six companies—two French, two Italian, one British and one German—filed a lawsuit at the EU’s second-highest court claiming compensation from Brussels for financial damages caused to their US exports because of the increased customs duties.

That claim was rejected in December 2006, with the court ruling that no compensation was payable and that the commercial harm suffered by the companies was not unusual.

Appeals against that 2006 ruling were lodged by the two Italian companies—industrial group FIAMM, which makes starter and standby batteries, car horns and antennae; and Fedon & Figli, which produces spectacles cases and leather accessories.

In the judgment, the ECJ dismissed the two appeals. “An economic operator cannot claim a right to property in a market share which he held at a given time, since such a market share constitutes only a momentary economic position, exposed to the risks of changing circumstances,” the ECJ statement said.

“An economic operator whose business consists in exporting goods to a non-member state must ... be aware that that business may be affected by various circumstances, including the possibility that that non-member state will adopt measures suspending tariff concessions,” it said. (Reuters)