Bananas: a small row over a big racket
Sunday 11 April 1999
Europe claimed that it protected banana imports to support poor, struggling Caribbean economies. But the WTO has said that the US was right to impose sanctions on European companies. Now Europe will have to adapt its banana regime. Quite likely, from now on, we will be eating more bananas produced by US firms.
It might seem strange that at a time when Europe and America need each other badly in Kosovo, they should be warring over a fruit that neither produces in great quantity. But the banana war has been part of a regular pantomime that both sides apparently find useful.
Like most trade rows, it was an opportunity for bombast and pretension in Washington and Brussels, as each hurled the accusations even as they geared up to fight a battle together. The US, for instance, pretended to be horrified that Europe was ignoring international law - something that Washington does routinely.
For its part, Europe pretended to be horrified that the US was acting in the interests of American companies which produce bananas in Central America. The British press, in particular, has tried incredibly hard to persuade itself that the only reason the US was pursuing its case over bananas was that "evil lobbyists" in the US paid off both parties on behalf of the US banana companies.
This stance conveniently ignored the fact that all trade policy, always and everywhere, is driven by lobbyists. The fine restaurants of Brussels do not prosper on the good taste of Belgians alone - they are full of lobbyists pushing for European trade interests. Equally, the restaurants of Westminster are full of people convincing politicians - probably over a bottle of luke-warm Chassagne-Montrachet - of the virtues of free trade or protection for their particular products. It is a racket, and always has been.
European companies, notably the Dublin-based Fyffes, benefit directly from the banana regime. The Europeans do not have a preferential regime just because their good, kind hearts break at the observed privations of the Caribbean nations; rather it benefits their businesses.
The US, on the other hand, was not going to impose sanctions on Irish companies, be-cause that would have violated an iron law of US politics - don't upset the Irish vote. The Americans also knew that Scotland's elections were imminent, and that British ministers would be scared off if Scottish companies were threatened with sanctions. So while Scottish firms which had no relation whatsoever to the case were lumbered with punitive tariffs, the Irish got off, Scot-free, as it were.
Many Europeans will wonder why the US was willing to make such a fuss about bananas when it seemed to need European support over in Kosovo. Most Americans have probably been wondering the same thing about those in Europe.
After all, it has only been because of the spectacular inability of the European Union to handle the breakup of Yugoslavia that American support has been "necessary". The astonishing ineptitude of European statesmen, from Jacques Poos, the former foreign minister of Luxembourg who said that Bosnia was "the hour of Europe", to Douglas Hurd, Britain's former foreign minister who took a job giving financial advice to Serbia with NatWest bank, has not been very encouraging.
The reality of the transatlantic relationship, which politicians on both sides are rarely able to acknowledge publicly, is that it includes co-operation as well as competition. The EU enjoys growing clout in trade matters, and the US, it would say, wants to slap it down.
The US has continuing hegemony when it comes to military affairs. But it is in the interests of both sides to allow rows like the banana split to emerge, because they are a peaceful means of fighting battles for political dominance.
Equally, it is in their interests to co-operate over Kosovo, because they can achieve more together than apart. With rifle in one hand and banana in the other, the transatlantic relationship is as healthy as ever - despite the rhetoric.
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