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Banana Wars

 

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The Banana Wars and the WTO

Slippery as they may be, bananas proved to be a major sticking point in world trade throughout the 1990s, leading to drastic 100 percent tariffs on nine European imports including coffee makers, plastic purses, and bath oils.

Starting back in 1993, the Big Bananas at Dole and Chiquita complained that European countries, which preferred bananas from their own former colonies, were unfairly tariffing their products. Millions of dollars in banana money began to flow to U.S. lobbyists and political campaigns, and soon the U.S. filed a complaint on behalf of Chiquita and Dole to The World Trade Organization (WTO), which oversees such trade disputes. The WTO sided with the American banana companies, allowing the U.S. to retaliate with its own high tariffs.

In 1998, the U.S. Trade office came up with a long list of possible items to tariff. After the various lobbyists got done with the list, only nine items remained to be slapped with the 100 percent duty, and none of them had anything to do with bananas -- or even food. The list included lithographs, plain bed linens, felt paper, and folding boxes.

The new tariff immediately hurt many small business in the U.S. and their European suppliers. But thanks to an agreement hammered out in the spring of 2001, those patent-leather purses and fragrant bath oils are again flowing freely from France and England. The Europeans finally agreed to open their markets to American bananas, removing this "sticking point" and greasing the wheels of globalization.

While WTO supporters say the Banana War settlement proves that the trade dispute system works, critics pose that the Dispute Panel, like all WTO members, is non-democratic. No one on this powerful organization is popularly elected, and yet their decisions effect millions of lives, over-riding the rule of governments that are democratically chosen.

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