The World Trade Organisation overcame a procedural hurdle on Thursday in the transatlantic dispute over banana imports, but the United States and European Union still seemed far apart on the underlying issue.
The WTO's Dispute Settlement Body (DSB) was finally able to get down to a meeting, which includes a US request for approval to slap swingeing trade sanctions on the EU.
The meeting had been blocked since Monday when two tiny Caribbean states refused to accept the agenda.
But no objection was raised when the DSB's chairman, Mr Kamal Morjane of Tunisia, told the body yesterday he was effectively overruling the agenda block, WTO spokesman Mr Keith Rockwell told reporters outside the meeting.
However, officials from the EU and the US appeared no closer on the substance of the dispute - whether Washington has the right to impose sanctions because it believes the EU's banana regime breaks fair trade rules.
"They are just not moving," one senior EU official said.
"The EU is intransigent," said a US source.
WTO director-general Mr Renato Ruggiero seemed slightly more upbeat, telling reporters as he went into the meeting that there was "a positive atmosphere", but giving no details.
Officials said Mr Ruggiero might give a formal statement later, possibly offering a legal way to resolve the row between the two powers, which he fears could undermine both the authority of the WTO and the world's trading system as a whole.
In Brussels, US Undersecretary of State for Agriculture Mr Gus Schumacher told a trade conference in the European Parliament that the entire capacity of the WTO to manage disputes was at stake.
And the US ambassador to the EU, Mr Vernon Weaver, told a business conference: "The banana row has been exacerbated by our Congressmen's knowledge that this is the same WTO that will have beef and GMOs come before it."
The immediate threat to the WTO lies in US insistence that its request to impose sanctions worth $520 million (€456 million) a year on EU goods must be granted, while the EU and other countries say it should wait.
At the centre of the row is the EU's controversial banana regime - a system under which Brussels manages the import and marketing of bananas for its 15 memberstates which in an earlier version has been found illegal by a WTO panel.
It favours ex-European colonies, mainly in the Caribbean, over Latin American producers.
In 1995, seeking to protect the interests of US-based marketing firms, the US challenged it successfully in the WTO with the backing of some Latin American states.
The US says the latest version of the regime, in force since January 1st, is also a violation of WTO rules, and has drawn up a wide-ranging list of EU imports to be hit by 100 per cent retaliatory tariffs before March 3rd.
The EU argues that Washington's action, taken while a panel studies the new regime, smacks of "unilateralism".
In the past few days, even countries which are unhappy with the way the EU has handled the dispute have backed this view, and say that if the US succeeds it could turn the WTO rules against them too.
