Commentary on the Appellate Body Report in EC-Bananas III (Article 21.5): waiver-thin, or lock, stock, and metric ton?

(ProQuest: ... denotes non-US-ASCII text omitted.)

The authors would like to thank Chad Bown, Alexander Keck, Hunter Nottage, and Nadia Rocha for valuable input. All opinions should be attributed to the authors and neither to the institution they are affiliated with, nor to its clients. It goes without saying that the authors assume full responsibility for all errors, flaws, and lapses.

1.

Introduction

The trade dispute over the European Community's banana importation regime is one of the longest-standing cases in the history of the WTO.¹ The fact-load of this case is mind-boggling, and through the years Bananas has left a long trail of panels, arbitrations, and procedural battles. The Appellate Body (AB) Report on the second compliance Panel under Article 21.5 of the Dispute Settlement Understanding (DSU) is the presently last stage in the Bananas saga.

The AB was summoned by the EC to assess substantial findings made by the compliance Panel under Articles II and XIII of the GATT, as well as a host of procedural issues. Sadly for the researcher charged with commenting on this case (but fortunate for the practitioner), there is little scope for criticism against the findings of the AB. Nevertheless, the compliance proceedings in Bananas III offer some interesting general legal and economic aspects, for example on the legal nature of Panel suggestions, the economics of tariff quotas, and the relationship between Article 21.5 Panels and arbitrations under Article 22.6 of the DSU.

This paper proceeds as follows: Section 2 gives a brief overview of the rich factual and legal background of Bananas III. In Section 3, we summarize the claims on appeal and the AB's findings, and offer a few observations. Section 4 provides a richer discussion of the legal and economic aspects in connection with the Bananas III dispute. Section 5 concludes.

2.

Factual background and original compliance Panel findings

In this section of the paper, we present a brief overview of the order of events, cite the relevant documents, and provide a summary of the claims in the Article 21.5 proceedings, as well as of the findings of the Panel Report.

2.1

Order of events²

As a result of the Single European Act of 1993, the European Union (EU) initiated the so-called...