Case Law: Case C-280/93, Germany v. Council, October 5, 1994, Not yet Reported in ECR

1 Colum. J. Eur. L. 312 (1995)

Petra Foubert. Assistant, Institute for European Law, Katholieke Universiteit Leuven.

External relations; Banana trade; Application of GATT by the European Court of Justice

Facts and Procedure

Until February 19, 1993, there was no common market for bananas in the European Community. The Member States could never agree on a common market organization and, consequently, the supply of bananas remained subject to market regulations differing widely from Member State to Member State. In a number of countries, the banana market was wholly or partially reserved for home production (“Community bananas”) or for imports from ACP countries (“ACP bananas,” imported from countries in Africa, the Caribbean and the Pacific),’ or for both. France reserved its market for bananas produced in the overseas departments of Guadeloupe and Martinique; Greece for bananas produced in Crete and Lakonia; Portugal for the production from Madeira, the Azores and the Algarve; in Spain the market was reserved for the production from the Canary Islands. The United Kingdom does not produce bananas, but covered its consumption by imports from former British colonies figuring among the ACP countries (e.g. Jamaica). The import of bananas from the ACP states was (and is still) governed by the Lomé Convention. According to this Convention, ACP bananas can be imported into the Community duty-free. The markets in the other countries were essentially supplied with bananas from other states (“third-country bananas”). The importation of third-country bananas was subject to a 20% import duty, consolidated in GATT, a worldwide, multilateral agreement aimed at liberalizing international trade. In 1957, Germany had obtained a special duty-free scheme for imports of third-country bananas.

Due, among other things, to differences in climatic and geographical conditions in the countries of production, the production costs and consumer prices for Community bananas and ACP bananas are appreciably higher than those for third-country bananas. In Member States where the national market was reserved, or partially reserved, for home production and/or imports from ACP countries, the average annual consumption of bananas was lower than in other Member States.

The widely differing national schemes for the supply of bananas hampered the free movement of bananas within the Community and precluded a common system of trade with third countries. In order to complete the internal
market, established in 1992, a common organization of the banana market replacing the national schemes became highly necessary. On February 13, 1993, the Council thus adopted Regulation 404/93 on the common organization of the market in bananas. Belgium, Germany and the Netherlands opposed its adoption, but since the regulation was based on Article 43 of the Treaty, permitting common agricultural policy regulations to be adopted by qualified majority vote, these states could not block it. The Community legislature started out from the premise that the common organization of the banana market must be implemented with due consideration for the interests of Community and ACP banana producers. One of the means selected by the regulation to achieve that purpose was the yearly opening of a tariff quota for imports of third-country bananas and bananas produced by ACP states which are not traditional suppliers to the Community (“non-traditional ACP bananas”). Within the framework of this tariff quota, imports of third-country bananas were subject to a levy of ECU 100 per ton and imports of non-traditional ACP bananas were subject to zero duty. Apart from the quota, the regulation subjects imports of non-traditional ACP bananas to a levy of ECU 750 per ton and imports of third-country bananas to a higher levy of ECU 850 per ton.

In May 1993, Germany brought an action under Article 173 of the Treaty to have the regulation annulled, Belgium and the Netherlands intervened in support. Germany based its claim on alleged breaches by the Council of essential procedural requirements, substantive rules and fundamental principles of Community law, and the Banana Protocol.8 The Court rejected all of these claims. Noteworthy among the Court’s rulings in this regard is that the objectives of the regulation, namely safeguarding Community production and maintaining the income of Community producers, come within Article 39 of the Treaty and that a development policy in favor of the ACP States may be based on the common agricultural policy provisions. Secondly, Germany alleged breaches of two international agreements, namely the Lomé Convention and the GATT. The Court rejected the German claim that the Lomé Convention forbids the Council to treat traditional and non-traditional imports of ACP bananas differently.” The Court’s treatment of the GATT  claim forms the principal subject of this note.