EEC - Production Aids Granted on Canned Peaches, Canned Pears, Canned Fruit Cocktail and Dried Grapes
EEC Canned Fruit (Source: GATT Analytical Index)
|Products at issue
Canned peaches, canned pears, raisins
|Type of product
Key legal aspects
|J. L. MacNeil (Canada)
|Shi-Hyung Kim (Korea), Bo Henrikson (Sweden)
|Legal basis at issue
|Claims at issue
|Defences at issue
|No of Pages (total / legal reasoning)
|31 (and 2 annex)
|Request for consultations
|Request for establishment
|Mutually agreed solution
|Outcome of the proceedings
Report issued, mutually agreed solution
|L/5778 (20/02/1985) European Economic Community - Production Aids Granted on Canned Peaches, Canned Pears, Canned Fruit Cocktail and Dried Grapes - Report by the Panel: The US had presented its complaint to the Panel as a case of a "non-violation" nullification and impairment. The Panel concluded that the production aids granted by the EEC since 1978 to processors of peaches and since 1979 to processors of pears nullified or impaired benefits accruing to the United States from tariff concessions granted by the EEC under Article II of the General Agreement in 1974 on canned peaches, pears and fruit mixtures and in 1979 on canned pears. With regard to canned peaches, pears and fruit mixtures the Panel concluded that the United States could not have anticipated the introduction of the subsidy at the time it negotiated concessions on these products in 1973. As regards concessions received in 1979, the United States should have been aware of the existence of the aid system for canned peaches. Inasmuch as that aid system benefitted processors of canned fruit mixtures the United States should have taken due account of it in negotiating concessions of that product.
The Panel concluded that the United States could not have reasonably foreseen the introduction of the aid system for canned pears. With regard to dried grapes, the United States could have reasonably anticipated during the various tariff negotiations that Greek producers and processors would continue to benefit from support prices, storage subsidies, and subsidization of the selling price of product from governmental agencies. Only to the extent that the EEC subsidy scheme for dried grapes was more than a continuation of the prior national Greek subsidy scheme and resulted in an additional upsetting of the competitive relationship between US dried grapes and Greek dried grapes on the market of the "EEC of nine" (i.e. without Greece), could the United States not have reasonably anticipated such additional EC subsidies and competitive distortions resulting therefrom.
With regard to canned peaches, pears, and fruit mixtures the Panel concluded that the minimum price granted to growers of fresh peaches and pears did not adversely affect the competitive relationship between EEC and imported canned peaches, pears or fruit cocktail. However, the Panel concluded that the production aids granted to processors upset the competitive relationship between EEC and imported canned peaches, pears and fruit cocktail.
With respect to the production aids granted to processors of dried grapes the Panel concluded that Greek processors had benefited already prior to 1974 from subsidies by Greek authorities so as to be able to market their product at competitive prices in the EEC. Although the "lesser flexibility" of the EC system could impart some additional market distortion at some time in the future should world market prices for dried grapes increase, the Panel was unable to conclude that, as yet, such distortion had occurred.
C/M/195 (06/03/1986) Minutes of Council Meeting (12/02/1986) Council discussed the Panel Report at its seven most recent meetings and had agreed to revert the matter to the present meeting. The Chairman "had been informed by the two parties that they had settled this dispute in a mutually satisfactory way." US: "the resolution of this problem had been facilitated by the Panel's excellent report. (...) While the United States would have preferred to have the report adopted, it would agree to take it off the Council's agenda."