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Much ado about bananas
April 7, 1999: 11:06 a.m. ET

While US-EU dispute drags, locals see little impact on business
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LONDON (CNNfn) - British banana vendor Richard Benson is puzzled.
     Daily headlines are screaming with U.S. complaints about Europe's "discriminatory" trade policies favoring bananas produced by the Old World's former Caribbean colonies rather than U.S. operated Central American plantations.
     "I haven't seen any Caribbean bananas around here since before Christmas," Benson said Wednesday, cradling a lemon-yellow bunch of plump Del Monte bananas at his fruit stall in central London.
     Bananas account for a quarter of Benson's business - so he is naturally going to be choosy about which ones he buys.
"You can't find European bananas here," says London banana vendor Richard Benson.

     Benson says none of his major suppliers have carried so-called "European" bananas in months. "Maybe it's the hurricanes," he said, referring to a series of savage tempests that have ravaged banana crops in some Latin American countries.
     Yet even if Caribbean bananas were in abundant supply, Benson added, he would be a hard sell.
     "If I get a choice, I tend not to buy Caribbean because of the size (small) and the color (dark)," he said.
A new front in escalating dispute

     The banana seller's words come the morning after the World Trade Organization opened a new front in a long-running banana dispute over American claims that the European Union's banana regime violates international trade rules.
     The WTO gave the go-ahead to an earlier, unilateral decision by the United States to slap harsh punitive tariffs on a wide range of EU goods from Italian pecorino cheese to Scottish cashmere sweaters.
     The WTO has sided with the United States five times since 1993 in banana disputes with the EU. In each case, the United States has sought relief from policies it believes favor European operations in Latin America over those of big U.S. producers.
     But the WTO panel stopped short of giving its full imprimatur to the U.S. policy by approving tariffs of $191.4 million - less than half the $520 million in annual damages the U.S. had been seeking to compensate for lost banana revenues.
     The U.S. lost little time, however, in claiming an important triumph in a global trade dispute that has drawn pointed charges from Europe's trade commissioner that the United States was acting like a "rogue state."
     "This decision is an important victory for the WTO dispute settlement process and sends a clear message that the WTO cannot be used to engage in endless litigation," Charlene Barshefsky, the U.S. Trade Representative, said in a statement.
     Yet to Benson, and others who derive their livelihoods from fruit hawking, the brinkmanship over bananas is not only politically puzzling - but slightly beside the point.
     Like other banana hawkers, he gives Mother Nature the credit for his preference, rather than any inherent failure on the part of the Caribbean fruit growers to compete with U.S. banana giants Chiquita Brands International, Dole and Del Monte.
     "Bananas are more like flowers," Benson said, "you can't mess around with them."
An emblem of a deeper showdown

     The befuddlement expressed by fruit sellers, some say, underscores the extent to which the EU-U.S. banana war has become a political football in a much deeper-rooted showdown between the world's two largest trading blocs.
     In recent days, the U.S. has openly hinted to European officials that they should be wary of trying to "export" their way out of their economic doldrums.
     The Europeans, in turn, have accused the Americans of openly flouting WTO rules governing global trade conventions by moving to impose sanctions before the WTO had ruled on the issue.
     Nonetheless, Leon Brittan, the acting vice president of the European Trade Commission said Wednesday the EU would abide by the WTO finding. But he also urged the U.S. to act promptly to implement the reduced tariff regime.
     The volley of recriminations stems in part from American concerns that as Europe's new single currency, the euro, consolidates its status as a viable competitor with the dollar, European trade policies could pose a mounting threat to U.S. commercial supremacy in certain parts of the world.
     Those viewing the banana dispute from afar, however, lend little credence to the arguments of either side.
     "Human beings are selfish, there's nobody at fault here," said B.R. Patel, the owner of Star Jewelers, an exporter and importer of fashion accessories based in London. "It's just a game of power."
     Patel, like many of his fellow merchants, views the banana war as a political intrigue between two dominant powers intent on safeguarding their interests.
     "They have all the money, they can spare it," Patel said. "It's the Third-World countries that will suffer."Back to top
     --By staff writer Douglas Herbert


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Banana battle heats up - Dec. 21, 1999


U.S. Trade Representative

World Trade Organization

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