Even before the creation of the World Trade organisation (WTO), the USA complained twice to the GATT (General Agreement on Tariffs and Trade) about European banana import policies: in 1993, just before the EU set up its single banana import regime, the GATT had already judged the national import regimes, which were about to disappear, as incompatible with its rules. The second judgement, in 1994, also went in favour of the USA: aspects of the European banana regime were deemed incompatible with GATT rules in that they gave preferences to some GATT members and not to others. The GATT, however, did not have the mechanisms necessary to force a reform of the EU policy or to apply sanctions.

During this period the EU banana regime was also challenged on several occasions in the European Court of Justice and in the German courts. Most of these challenges were lodged by German import companies who felt cheated by the regime. Not all these legal challenges were however successful.

Then in 1996, a little more than a year after the establishment of the WTO, five countries - Honduras, Guatemala, Ecuador, Mexico and the United States - lodged a complaint against elements of the European banana regime which they considered to be 'discriminatory' to their interests. Honduras, Guatemala and Ecuador, the world's biggest exporter, judged that they did not have sufficient access to the European market. The USA was of course involved on behalf of their multinational companies, one of which, Chiquita Brands International, was especially keen to increase its access to the European market.

When a complaint is lodged with the WTO, its Dispute Settlement Body (DSB) sets up a Special Group - a panel of experts whose role it is to determine whether the policy challenged by the plaintiffs is compatible or not with the base principles of the WTO. This Special Group - or Panel - can summon any country, directly concerned or not, to appear before its experts. However, countries with limited trade law expertise within their small populations found themselves at a disadvantage: the legal representative of the St Lucian Government was thrown out of the Special Group hearing on the grounds that he was not a St Lucian citizen!

After 16 months of deliberation, having heard 27 countries and published four reports of several hundred pages, the DSB made public its ruling: the European Union was entitled to keep preferential agreements with ACP countries, but had to reform certain key elements of its import regime, in particular the method of allocation of licences, and the national allocation of ACP quotas, both judged to be discriminatory. These 16 months included the first-ever use of the WTO's Appellate Body, a formal procedure by which the challenged party can appeal a DSB decision. Having lost the appeal, the EU had 15 months from 25 September 1997 to formulate and implement changes, otherwise it risked economic sanctions.