(Feb. 18) The European Union has lost another round in its long-running tariff dispute with Latin American banana producers and the U.S.

A World Trade Organization panel recently issued an interim report on the challenge brought by the U.S. against the EU’s banana import regime. Though WTO interim reports are confidential, a U.S. trade official confirmed that the panel sided with the U.S.

The banana dispute is the longest running in WTO history, dating to 1996. The U.S. and Latin American countries have argued that the EU’s system unfairly favors African and Caribbean countries, many of which are former British and French colonies. The U.S. challenge was the 10th proceeding against the EU, the trade official said.

The WTO sided with Ecuador in a similar case late last year, and Colombia has a case pending.

The EU’s tariff-only banana policy took effect in 2006, after a nearly five-year transition from a license-and-quota system that the U.S. and Latin American producers had fought since its introduction in 1993. The WTO ruled against the old system in 1997 and upheld U.S. sanctions of European goods in 1999.

In 2001 the EU agreed to transition to a tariff-only system. However, the new system also has been controversial. The tariff is 176 euros per ton, which was the equivalent of $256.41 per ton as of Feb. 14. Meanwhile, the former colonies can ship up to 775,000 tons duty free.

According to the Associated Press, the EU can appeal the rulings in favor of the U.S. and Ecuador when the confidential rulings are finalized and released.

If the U.S. prevails, the country could levy sanctions on European imports equal to damages incurred by U.S. companies. Chiquita Brands International Inc., Cincinnati, said in its annual report last year that the tariff added $75 million in net costs in 2006.

A Chiquita spokesman could not be reached for comment.