Banana War

Topics: International trade, Caribbean, United States Pages: 2 (431 words) Published: May 26, 2008
In the late 1990s, a trade dispute erupted between the United States and several European countries over a popular fruit – bananas. At issue was whether or not, under World Trade Organization rules, the Europeans had the right to give preference to fruit imported from their former colonies.

When the colonial era came to a close in the 1950s and 60s, Britain, France, and Italy signed trade agreements with their former colonies in the Caribbean, Africa, and the Pacific. Their purpose was to help their newly independent former colonies get off to a good economic start by giving them favored status.

One of the most important of these agreements was know as the Lome Convention. Among other provisions, it established a quota for bananas produced in Jamaica, Belize, Suriname, and the Windward Island. The Europeans agreed to buy a certain number of bananas each year from these Caribbean former colonies (amounting to about one-quarter of all European consumption). It also committed the Europeans to levy a tariff, or tax, on bananas imported from non-Lome countries.

In 1996, the United States lodged a complaint against the European countries before the World Trade Organization. The United States said the Europeans were discriminating against bananas grown by U.S. based fruit companies, including Chiquita Brands, Dole Foods, and Del Monte. There companies grew bananas mainly in Central American nations that were not parties to the Lome Convention, so they were hurt by the tariffs and quotas.

The United States was joined in is complaint by Ecuador, Guatemala, Honduras and Mexico – all banana exporting countries that, as former Spanish colonies, were not part of the Lome Agreement. Also opposed to the preferential treatment of bananas were Germany and Denmark – non Lome countries whose citizens simply wanted cheaper bananas.

The Caribbean nations argued that their bananas, a different variety, were sweeter and tastier than those grown in Central...
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