Cablegate: Goe Letters to Secretary Rice and Ustr Portman

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS QUITO 002765

SIPDIS

DEPT. PASS TO USTR BENNETT HARMON

E.O. 12958: N/A
TAGS: ETRD EAGR PREL EC WTO
SUBJECT: GOE LETTERS TO SECRETARY RICE AND USTR PORTMAN
REGARDING ECUADOR-EU BANANA TARIFF DISPUTE

We received, December 7, two original letters signed by the
Ministers of Foreign Relations, Foreign Trade and
Agriculture, addressed to Secretary of State Rice and USTR
Portman. Copies have been faxed to WHA/AND and USTR and the
originals are being forwarded by mail. The text of both
letters is the same, and states as follows:

Brussels, 30 November 2005

On Tuesday 29 of November 2005, the Competitiveness Council
finally reached an agreement on the Commission's proposal on
bananas. Ecuador believes that the proposal of 176 Euros/T
tariff for Latin American bananas and a TRQ of 775.000 T at 0
duty for ACP suppliers, does not fulfils (sic) the European
Union's obligation of "at least maintaining total market
access for MFN suppliers."

As a result, upon entry into force of a new tariff regime for
imports of bananas, the GATT article l.1 waiver shall cease
to apply. Consequently by December 31st 2005 both the GATT
article XIII and article l.1 waivers are no longer in force,
obliging the EU to apply a single tariff to all imports.

Furthermore, in 2001 Ecuador, the United States and the
European Union signed two Understandings to settle the
long-standing banana dispute. Those Understandings establish
that no latter than 1 January 2006 a tariff only regime had
to be introduced, which by definition should not consider
special treatments such as the proposed TRQ for the ACP
suppliers.

The Commission's proposal then violates the Understandings.
Such violation cannot be covered simply by a new GATT article
XIII waiver but requires a specific agreement of the Parties
to the Understandings.

Ecuador will make use of all the legal instruments available
within the WTO to preserve its rights, as it has done
successfully in the past. Nevertheless, Ecuador hopes that
the EU will be willing to engage into negotiations in order
to reach a mutually satisfactory solution.

We avail ourselves of this opportunity to renew to you the
assurances of our highest considerations.

signed by:

Francisco Carrion-Mena, Minister of Foreign Relations
Jorge Illingworth, Minister of Foreign Trade
Pablo Rizzo, Minister of Agriculture
JEWELL

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