BBC News Online: Business: Economy

Ecuador wins right to punish EU

The WTO has authorised Ecuador - the world's largest banana producer - to hit the EU with sanctions worth more than $200m a year.

Correspondents say it is the first time a developing country has been allowed to retaliate against industrialised nations since the creation of the WTO in 1995.

Ecuador has said its retaliation will consist of suspending agreements on intellectual property rights. It had requested the right to impose $450m of sanctions.

The penalty follows a WTO ruling in May that the EU's import policies discriminated against Latin American banana producers and their US distributors, in favour of former European colonies in Africa and the Caribbean.

The US was authorised in April to impose customs duties amounting to $191m.

In Brussels, European Commission spokesman Peter Guilford said he hoped Ecuador would not impose sanctions, but try to solve the issue through negotiations.

In a separate statement, EU Trade Commissioner Pascal Lamy said Brussels knew it had to come into line with WTO rules and he hoped the EU's member states would quickly approve a commission proposal in that direction.

A spokesman for Ecuador's banana producers, Enrique Gomez, told the BBC he was satisfied with the ruling.