Dáil Éireann debate -
Tuesday, 9 Feb 1999

Vol. 500 No. 1

Written Answers - EU Banana Import Regime.

David Stanton

Question:

100 Mr. Stanton asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on the dispute involving trade in bananas between the European Union and the United States; if this dispute will impact on Irish companies; if so, if she will give details of this; the action, if any, she proposes to take regarding the issue; and if she will make a statement on the matter. [3691/99]

Minister of State at the Department of Enterprise, Trade and Employment (Mr. T. Kitt)

As the Deputy will be aware, US reaction to changes in the European Union's banana import regime to bring it into line with World Trade Organisation, WTO, rules has been to threaten trade sanctions against certain exports from the European Union, including Ireland. The agreement reached on 29 January in the WTO in Geneva means that for the moment the US threat has been averted.

Under the terms of the agreement, a WTO dispute panel is examining the recently revised EU banana import regime and willl pronounce on its compatibility with WTO rules. The panel will also examine the US request for authority to impose trade sanctions and will assess the appropriateness of these under the WTO rules. It is expected that the results of the WTO panel's work will begin to become available at the beginning of next month and it is hoped that it will then be possible to resolve the matter within the mechanisms of the WTO. If these efforts prove unsuccessful the US sanctions could apply from early March.

I am well aware that for some exporters, particularly small exporters, in particular sectors, a loss of potential US markets could represent a serious strain on their resources. It is for this reason that every effort needs to be made to avoid trade sanctions, although the threat of such sanctions remains real. If the US action goes ahead, I estimate that Irish exports affected could be of the order of £3 million per annum spread across a range of products. By comparison, the total amount of EU trade affected could be in excess of £400 million.

Ireland has been active within the internal EU discussions and the broader Geneva discussions in working towards a resolution of the dispute within the dispute settlement system of the WTO. I consider it important that this system, the cornerstone of the WTO, is not undermined by unilateral sanctions action. Enormous effort has been invested in building the WTO which provides a stable global trading environment. Unilateral action to resolve trade disputes endangers this environment and the economic benefits which derive from it.