The weight and relentlessness of pressure from the US and several Latin American countries compelled the EU, under threat of economic sanctions, to announce the reforms that came into force on 1 January 1999. The key elements of these reforms were: 

• The allocation of nearly 90% of the dollar banana quota to the four main supplier countries - Ecuador, Costa Rica, Colombia and Panama. All other countries, including ACP countries like the Dominican Republic and Ghana, which are not part of the 12 traditional ACP exporters, were to compete for the remaining 10%. 
• The elimination of export certificates and simplification of the allocation system for import licences. 
• The elimination of national allocations within the ACP quota. Each ACP country could now export as much as it wanted up to the same combined annual maximum of 857,700 tons.
• The way in which EU production costs are calculated was revised, and the threshold above which compensation payments are triggered was raised.

The countries benefiting most from the reforms were the four main Latin American exporting countries, which now had a guaranteed share of the European market, and the most competitive among ACP countries, in particular Cameroon, the Ivory Coast and Belize, which, with the cancellation of national quota allocations within the overall ACP quota, were now able to increase their tariff-free exports to the EU.

But Ecuador was still unhappy with the share of the dollar quota it had been given (26.2%) as well as with a system of licence allocation which it felt still discriminated against Ecuadorian exporters. Two weeks before the reform was due to come into force, the Ecuadorian government lodged a new complaint with the WTO.

The US, still lobbied by the powerful Chiquita, was not satisfied either and announced in February 1999 sanctions against a range of European products - to the value of US$191,4 million a year. Although the WTO judged these sanctions to be in breach of its regulations for having been made unilaterally, they nevertheless came into play on 3 March 1999. Tariffs of 100% on entry to the US market were added to products entirely unrelated to bananas, such as decorative candles, cheeses, bath salts, cardboard packaging and coffee-makers.

In April 1999, a new Special Group of the WTO ruled in favour of Ecuador: the EU's reformed regime did indeed discriminate against Ecuadorian exporters, it concluded. Once again, the EU was granted 15 months to align its banana import regime with WTO rules and recommendations. The EU began to study the few options that remained open for the allocation of its licences and to propose alternatives.

In 2000, Ecuador, tired of waiting, obtained from the WTO the authorisation to apply sanctions against the EU to the value of US$201 million a year. It was the first time that a developing country had 'won' a dispute against one of the world's trading giants. Ecuador, however, found it difficult to apply sanctions when most of the products it imports from the EU are basic foodstuffs for feeding its population. High tariffs on these would have been suicidal for the Ecuadorian government, which changed tack and demanded instead that its share of the EU banana market be increased.

Meanwhile, changes were taking place in the various positions of the member countries of the EU, making impossible a reform within the time limits set by the WTO. It was not until April 2001, just when it looked like the EU was about to implement a highly controversial 'first-come-first-served' system of licence allocation, that the EU announced it had finally found agreement with the two plaintiffs, Ecuador and the US.