Although the European Union (EU) implemented its reformed banana import regime in two stages in July 2001 and January 2002, it was always clear that this was only a transitional arrangement.. The agreements that the EU signed with the United States and with Ecuador in April 2001 effectively suspended the dispute that had been played out in the World Trade Organisation. A key part of the commitment by the EU was to turn its Tariff-Quota regime - which puts restrictions on the amount of bananas that can be imported and also enables ACP countries to import duty-free - into a “tariff-only” regime by 2006. A “tariff-only” regime would remove the restrictions on the volumes of bananas imported.

Under separate WTO arrangements, the EU could keep in place the tariff preference for ACP banana imports, at least until 2008. The necessary “waiver” to WTO rules was agreed at the WTO Ministerial Conference in Doha in November 2001, but was linked to another key commitment by the EU: that its proposal for reform could be referred by the Latin American exporters to a special arbitration procedure in the WTO, if they felt that it would not “at least maintain their market access” to the EU banana market. If the arbitration did not produce a mutually agreed reform, then the ACP waiver permitting duty-free treatment would fall.

One fundamental question that remained to be answered was the level of the tariff that 'dollar' – or ‘third country’ - bananas would have to pay.Without quotas, there would be the serious danger that the market would be flooded, therefore pushing prices paid to importers down. The workers at the beginning of the chain would likely suffer the consequences of a squeeze on labour costs and would risk losing their jobs altogether if the multinational companies decided to abandon some countries in search of cheaper production. If the tariff were fixed too low, the Windward Island banana farmers (see below) would almost definitely be squeezed out of the market. If it were fixed too high for the Latin American exporters liking, then the suspended dispute proceedings in the WTO would almost certainly be relaunched.

It is far from certain that the EU will definitely bring in a tariff-only regime, as some of the companies and governments believe it is in their interests to maintain the tariff-quota regime, but the EU would have to get agreement from its Council of Ministers and main trading partners not to do so.