This panel was convened at 2:30 p.m., Friday, March 26, 2010, by its moderator, Berta HernAndez-Truyol of the University of Florida Levin College of Law, who introduced the panelists: Ibrahim Gassama of the University of Oregon School of Law; Ernesto HernfindezL6pez of Chapman University School of Law; Eleanor Brown of George Washington University Law School; and Chantal Thomas of Cornell University Law School. *
* Eleanor Brown and Chantal Thomas did not submit remarks for the Proceedings.
GOOD BANANAS, BAD BANANAS: HARD LESSONS FROM A SOFT WAR
In April 1997, protesters dumped 2,000 pounds of bananas in front of the United States Trade Representative's office in Washington, D.C. (1) The protest, organized by human rights lobby TransAfrica, sought to highlight the plight of Caribbean countries facing an adverse ruling from the World Trade Organization (WTO) over their banana exports to European Union countries. Under a 1993 trade agreement, bananas exported from these Caribbean nations, together with bananas from many other former European colonies, were granted preferential access to the European Union market. Largely at the behest of Chiquita Brands, the United States challenged the European banana regime before the WTO. Ecuador, the world's top banana exporter, and other Latin American banana-exporting countries supported the American complaint. (2)
By the late nineties it was clear that the European banana regime faced great difficulty under WTO rules. Caribbean banana-producing countries began a global campaign outside the legal structure, procedures, and doctrines of the WTO to preserve their preferential access; hence the turn to public relations and grassroots efforts to build transnational support. In the United States, they received support from a diverse coalition of human rights, labor, agriculture, and environmental activists. In December 1996 I was the reporter for an "eminent persons group" mission to Antigua, Dominica, Jamaica, and St. Lucia to examine "the impact of the US challenge to the EU banana regime on political, economic, and social order in the Caribbean and the consequences for U.S. national Interests." (3) The April 1997 demonstration helped to publicize the mission's report.
The banana conflict officially ended last year, more than a decade after initial global grassroots efforts to defend EU access for "Caribbean bananas." The European Union agreed to reduce tariffs on Latin American bananas by 35 percent over a seven-year period. (4) However, the European Union essentially maintained its policy of tariff-free access for Caribbean bananas. U.S. and Latin American producers accepted the deal, with the head of the Ecuadorean Banana Exporters' Association calling it "a great victory for both producers and consumers." (5) The response of Caribbean banana interests to the deal has been muted, due perhaps to the fact that they will lose about forty-five million dollars annually because of increased competition. To say that the sixteen-year conflict ended with a whimper would be a significant exaggeration. It took so long and accomplished so little in substance because it wasn't that important after all.
ff the banana dispute was a war, it was a war of attrition with resolution necessitated by exhaustion.6 With the exception of some Caribbean banana interests, all parties seem satisfied by the resolution. Chiquita claimed victory, stating that for every ten-euro reduction in tariff, the brand will save about twelve million dollars a year. European Union consumers get lower prices for their favorite fruit even as their supermarkets add a few more cents to their profit from lower costs. Latin American complainants get to export even more bananas to Europe, Even the Caribbean governments still upset over the loss of revenue have had some of their pain eased by a one-time cash payment from the European Union.
In the following section, I criticize the idea that this dispute was a war, or even a big deal that tested the dispute resolution capacities of the new global trading regime. I then outline some of the lessons that should be remembered from the course of the dispute. I conclude with a call to refocus global attention on the extreme inequities represented by the enormous level of agricultural subsidies in developed countries.
For all the talk of war and the predictions of dire consequences for the global trading regime, the fight over banana exports was akin to a series of highly choreographed skirmishes worthy of the Nutcracker Ballet--elaborate paper-mache sword fights carried out by costumed principals who never misunderstood that their fundamental mission was to preserve a carefully cultivated arena dedicated to defending their advantages. This was no war at all, as far as the principals were concerned. Nothing fundamental was at stake.
Neither the U.S.-led complaint nor the European defense made economic sense. The Caribbean countries accounted for only 3 percent of global banana trade. The European banana market totaled about three billion dollars at the time the complaint was brought. Only one U.S. company, Chiquita, cared enough about the EU subsidies to seek U.S. government intervention, and it had most of its operations and employees outside the United States. A change in EU subsidies favorable to the Chiquita position offered little discernible benefit to the American economy. The U.S. decision to focus on such a fringe area of world trade in one of its first complaints before the new WTO is questionable from an economic sense. The political clout of Chiquita's lobbyists provides a better explanation.
The European defense of an enormously complex, expensive, and wasteful subsidy regime was incredible from a sound economic perspective. Vague sentiments alluding to colonial guilt and post-imperial responsibilities could not be taken seriously. Reinforcing a woefully uncompetitive primary agricultural industry in former colonies was hardly the panacea for the ills of colonialism. The needs of European Caribbean banana distributors and influential banana export lobbyists in the Caribbean offer a better explanation for the tenacity of the European defense.
Both Latin American and Caribbean authorities could be forgiven for defending an industry that holds little promise of the development breakthrough they desperately need. Given how little the world of trade grants them, they can hardly be faulted for protecting the interests of multinationals who dominate their economies. Caribbean countries that depend so heavily now on banana exports recognize that it is a dead end for them. No amount of preferences will make their bananas competitive with plantation bananas. On the other hand, Latin American countries maintain...