Alter, Karen and Sophie Meunier. "Nested and overlapping regimes in the transatlantic banana trade dispute". Journal of European Public Policy, Vol.13, No.3 (2006): 362-382.

Alter, Karen and Sophie Meunier. "Nested and overlapping regimes in the transatlantic banana trade dispute". Journal of European Public Policy, Vol.13, No.3 (2006): 362-382.

• Most advanced industrial democracies are members of a number of overlapping international organizations, which impose different obligations. These obligations occasionally conflict with each other and with national foreign policies (362). This article attempts to show this mechanics through disagreements on transatlantic banana trading, which resulted in an 11-year dispute between the EU and USA, despite the fact that no one cared (363).
• Unfortunately for the frequency of conflicting international rules and obligations, there is no single hierarchy of laws that can be used to determine the appropriate legal framework when international and national laws conflict (364). In international contexts, furthermore, the authorities that can decide on hierarchy are disputed or unclear (365).
• At the time of the Single European Act [SEA] in 1986, the market on bananas was particularly fragmented, as each member of the European Economic Community [EEC] had a different trade policy, based on its own past imperial relationships to Asian and Latin American banana markets (366).
• By 1989, three different types of banana import regimes existed:  France, Italy, UK, Greece, Portugal and Spain had abolished banana tariffs for the 69 former colonial banana producers in accordance with the Lome Convention;  Belgium, Netherlands, Luxembourg, Denmark and Ireland imposed a 20% tariff on all banana imports; and Germany had its own 'banana protocol' in the 1957 Rome Treaty that specifically lifted tariffs on Latin American bananas (366).
• From the passage of the SEA, the EEC had to create a single trade policy towards bananas out of multiple different interests, while still remaining in accordance with its obligations under the Lome Convention, the GATT, the SEA, and Germany's special access rights in the Rome Treaty (366).
• The regime that was eventually agreed upon in December 1992 was fiendishly complex, where bananas from the EEC had free access; imports from developing countries under the Lome Convention had tariff-free access up to 857,000 tons, after which they were charged a tariff of 750 ECU per ton; and non-Lome countries could import 2 million tons at a 20% tariff, after which it was increased to a 170% tariff (366).
• The import regime was controlled through the issuing of import licenses. A minimum of 2/3 of the licenses had to be issued to Lome or EEC importers, with the other third reserved for other importers (366).
• The ECU, European Currency Unit, that tariffs were regulated in was a set basket of different European currencies that could translate in value any individual member state's currency. 
• This new regulation was passed by qualified majority vote [QM voting] in December 1992, but later challenged by Denmark, Germany, and Portugal. After a series of confusing changes, it was implemented in July 1993 (367).
• The banana policy was first contested from within the European Community [EC], mainly by Germany. Germany was the world's highest per capita consumer of bananas, had the lowest banana prices in Europe, and imported 99.7% of those bananas from the dollar zone group. It suffered uniquely from the EC banana policy, and sued the EC in the European Court of Justice [ECJ] in 1994 for violating GATT law, although the court sided against Germany (368).
• The greatest beneficiaries of the new EC policy on bananas were the UK and France. Both states had overseas territories in the Caribbean that produced bananas and whose industries benefited from less competition from Latin American markets (368).
• The EEC banana trade policy was immediately challenged in 1992 in GATT by a number of Latin American banana producers, known as the 'dollar zone group' and including Costa Rica, Colombia, Guatemala, Nicaragua and Venezuela. They argued that the new policy discriminated against non-Lome products in an unfair way, which the GATT tribunal agreed with, but the ruling was blocked by the EEC and Lome signatories (367-368).
• The dollar zone group sued the EC again in 1994 and the GATT arbiter again ruled in favor of the dollar zone group, but the EC and Lome signatories blocked the ruling by refusing to vote on the issue (369).
• Knowing that the new WTO would be created in 1995 and that it would not be possible to block arbitration in that body, the EC made a deal with the dollar zone group that if they didn't sue the EC, the EC would change the rules to increase non-Lome import quotas and lower tariffs on non-Lome bananas. In March 1994, all of the group except Guatemala, agreed to the deal despite protests from the US, Germany, and Guatemala (369).
• Neither Ecuador, the USA, nor Guatemala were members of the WTO at this time, causing the EC to ignore them in its negotiations (375).
• Banana importers challenged the new framework agreement between the dollar zone group and the EC in Germany, arguing that the German Constitutional Court had the ability to determine if GATT law or EC law had priority in Germany. The Constitutional Court eventually decided that it did not have competency on the issue, as GATT law had become an issue for the EC as a whole, not individual states (369).
• In 1995, the USA sued the EC in the new WTO court on behalf of Chiquita Inc., an American banana exporter based in Latin America who suffered from 'unfair trading practices' (369-370). Guatemala, Honduras, Mexico, and Ecuador joined in the suit, charging that EC had broken GATT and GATS by giving preferential treatment to Lome Convention nations (370).
• Ecuador considered the issue of banana import of such importance to its economic well-being, that it pushed through and compromised on many of its principles in joining the WTO, just so that it could challenge the discriminatory banana trade regime (376).
• In May 1997, the WTO issued a ruling that special trade arrangements with the Lome countries was not per se a violation of trade law because it was an exceptional circumstance, but that the special status conferred on the dollar zone state which had defected in 1994 was a violation of GATT (370).
• In 1999, the EC increased its banana import quotas to accommodate new member states and replaced its import licensing system with one it claimed was compatible with the WTO. However, the US maintained its complaints over import quotas and the WTO authorized retaliatory sanctions against the EC by the US and Ecuador (370).
• The dispute over bananas was only resolved in 2001, when the EC agreed to transition to a tariff system without quotas by 2006, at which point the US ended its retaliatory tariffs on European imports (370).
• Despite being over an issue of negligible trade between the two nations, the bananas trade dispute inconvenienced European consumers, importers, and banana producers. It only severely damaged the credibility of the WTO, widely seen as preventing the EC from trying to favor poor former colonies and being stopped by globalist American hegemony (371).
• If the EEC/EC did not exist, then the dispute would not have come into existence. The uniform tariffs of the Germany, Belgium, Denmark, Ireland, and Netherlands did not violate GATT rules, and none of the EEC states would have violated those rules after the Lome Convention was given exceptional status (372).
• In many ways, the form of trade harmonization based on a quota system did not make sense for the EC, as it violated WTO rules and was administratively complex. The alternative solution of instituting universal tariffs on non-Lome banana imports, however, was not considered feasible because the EC is not allowed to earmark tariff revenue, meaning that the quota system was seen as the better way of promoting aid and development (372).
• On the interstate level, banana producers in Spain and France also argued for the non-implementation of a tariff system, which they felt would have not provided enough protection for EC banana growers from Latin American imports (372).
• German behaviors would have been particularly different without the EU, as German importers were hardest hit by the sudden cessation of their ties to Latin American producers. This prompted the court cases in Germany, and German compliance was only guaranteed by a substantial bonus for Bavarian farmers in the EC agricultural budget (373).
• An entirely tariff-free system of banana import, where the dollar zone group would have dominated due to superior agricultural techniques and environmental conditions, would have violated the Lome Convention, which requires EC states to privilege the import of products from very poor countries (373).
• Originally, those European countries without colonies strongly opposed the Lome Convention as limiting their economic freedoms so that former colonizers could maintain a 'special relationship'. The drafters of the convention, however, sold the idea as a massive aid projects, convincing Germany, Italy, and others to sign on (374).
• "The ECJ tries when possible to interpret EU law consistently with WTO law. When the Council explicitly invokes international legal obligations or makes clear that the EU law is intended to bring the EU into compliance with an international obligation, the ECJ acts as the Council’s enforcer, making sure that EU law and member state law comply with international legal obligations. However, it leaves the decision about whether or not to comply with WTO rules as an issue for political bodies to resolve" (377).
• Although its own byzantine policy and bureaucracy cannot help the situation, the primary cause of the EU's messy relationship with international law in its position nestled into multiple laws of international commitments. Even an efficient EU would have difficulty resolving its conflicting international and national legal obligations (378).