The Banana Wars

By Levy, Adam | Hemisphere, Spring 2000 | Go to article overview

The Banana Wars


Levy, Adam, Hemisphere


Few would have thought that a trade conflict involving import barriers on Latin American bananas could drag the US into a heated trade conflict with the European Union (EU). Yet, on March 3, 1999, the Clinton administration unilaterally imposed trade sanctions on European products valued at $520 million, an amount the US claims equals the losses incurred by its commercial interests due to European banana import restrictions. The reprisal came after three favorable rulings in the World Trade Organization (WTO) condemned the EU's banana trade restriction as a violation of international trade law, although a subsequent ruling last April trimmed the amount of US sanctions authorized to $191.4 million.

The roots of the conflict go back to 1993, when Latin America's banana-producing countries entered into a dispute with Europe and its former Afro-Caribbean-Pacific colonies (known collectively as the ACP). In what came to be known as the Declaration of Guayaquil, on February 12, 1993, eight Latin American countries pledged to fight the European banana import regime collectively using GATT's dispute resolution mechanisms. In these days before US involvement, the conflict was notable for the divergent levels of economic power among the major players: the European Economic Community (EC)--an economic powerhouse--confronted a loose coalition made up of Costa Rica, Colombia, Panama, Ecuador, Honduras, Nicaragua, Guatemala and Venezuela. Given Latin America's emphasis on outward-oriented models of development, the evolution of the conflict during this period provides important insights as to whether international trade dispute mechanisms can function effectively to defend Latin America against the unfair trading practices of more powerful developed countries.

DOLLAR BANANAS AND ACP BANANAS

The 1993 EC trade legislation limited Latin American banana imports to two million metric tons beginning in 1994, subjected them to a tariff of 100 Ecus (US $175) and created a complex import licensing scheme. Europe justified the trade restrictions to protect former ACP colonies, such as Jamaica, the Philippines, St. Lucia, the Windward Islands, Cameroon and the Ivory Coast, and European domestic possessions, including Guadeloupe, Martinique and the Balearic Islands. Since 1975, the Lome Convention had granted ACP countries trade preferences on bananas, with the rationale that many ACP producers are smaller and less competitive than their Latin American counterparts. Under the new system, ACP countries and European possessions were allocated duty-free annual quotas of 857,700 and 854,000 metric tons, respectively.

Latin Americans greeted Europe's new banana trade policy with predictions of economic devastation. Latin American producers had increased the amount of land under banana cultivation in the 1980s, expecting increased demand from a newly unified Europe and Germany. Trade analysts estimated that the new restrictions would result in a global glut of 900,000 metric tons of surplus production.

To the US multinationals that dominate the commercialization of Latin American production, the most grievous aspect of Europe's banana trade policy was the complicated licensing scheme it introduced. These regulations required an import license for every box of bananas brought into the EU. Of the newly reduced market of two million metric tons now allocated to Latin America, the EU gave many import licenses to European primary importers, banana distributors and ripeners, even though many of these companies had not imported bananas directly from Latin America before. Once the import regime took effect, the licenses were a requirement for anyone wishing to sell in Europe. They could be sold without importing any fruit at all for an average price of between $4 and $8. United Fruit, the largest US exporter to the EU, bore the brunt of the licensing scheme. Its EU market share declined by about 25% from 1991 to 1994, according to EU officials. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • A full archive of books and articles related to this one
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Banana Wars
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

    Already a member? Log in now.