Sunday, March 28, 1999

U.S. banana stance puzzling to Europeans


They see their purchases as stabilizing Caribbean

BY PAUL BARTON
Enquirer Washington Bureau

        WASHINGTON — As both sides of the Atlantic gird for a trade war over bananas, Europeans continue to be amazed that the United States is willing to put up such a fuss on behalf of one company, Chiquita Brands International of Cincinnati.

        “If we do this over bananas, what's it going to be like when we look at other areas that might be more relevant to American jobs?” asked Peter Reid, British embassy spokesman.

        “It is ridiculous to have a fight like this between allies,” he said.

        The Scottish Daily Record & Sunday Mail recently started a campaign to discourage Scots from buying Chiquita bananas.

        Scottish cashmere sweaters are one of the items the United States is placing contingent tariffs on to make its point about bananas.

        “The people of Scotland send a message today to trade war tycoon Carl "Mr. Chiquita' Lindner: We're banning your bananas,” the newspaper said in an article published March 7.

        Mr. Lindner is head of Chiquita and is seen as having considerable influence on U.S. trade policy.

        Europeans also see the United States as causing more problems for itself within its own hemisphere if it wins the banana war — namely an expansion of drug trafficking.

        The Clinton administration's announcement this month that it was preparing to enact 100 percent tariffs on a wide range of European luxury goods jarred the business communities in both Europe and the United States.

        It signaled to many that the six-year dispute between the United States and the European Community over bananas was entering a much more serious phase.

        U.S. trade officials said the European Community was forcing it to take drastic action by refusing to adhere to World Trade Organization rulings on bananas.

        European countries have been granting preferences to bananas grown in former colonies in Africa and the Caribbean.

        In the meantime, Chiquita, which gets its bananas largely from Central America, has seen its share of the European market shrink dramatically.

        The WTO ruled that the Europeans' banana regime, or import allocation scheme, violated world trade rules.

        The EC, however, claims that it is now in compliance with the WTO.

        “We have corrected our system,” said Willy Helin, spokesman for the European Community delegation in Washington.

        The United States, however, continues to insist it hasn't.

        A WTO panel is studying the situation anew and is scheduled to issue a ruling by mid-April.

        In the meantime, European officials see themselves as having failed in a public relations war with the Clinton administration and Chiquita.

        They have not directed enough attention to the humanitarian and developmental purposes behind their banana posture, they say.

        European countries see trade preferences to their former colonies as a way to prop up the economies of those small nations, Mr. Helin said.

        “The fact that nobody seems to grasp what this is about” continues to frustrate Europe, Mr. Helin said.

        “What this is about in a nutshell is we have struck a fair balance between trade issues and developmental aid policy.”

        If Europe adjusted its banana purchases to the extent that the United States argues is necessary — shifting about $520 million in business back to American firms like Chiquita — it would decimate the economies of those Third World countries, Messrs. Helin and Reid contend.

        An increase in drug trafficking would be inevitable, they add.

        “Those drugs would not end up in Europe. They would end up in America,” Mr. Reid said.

        Caribbean officials say there is little doubt that their countries could be economically devastated if deprived of banana markets.

        “These small countries have very limited economic alternatives,” said Richard Bernal, Jamaican ambassador to the United States.

        While U.S. officials contend that it is important that WTO rules be enforced, Caribbean countries, like those in Europe, wonder why America gets so upset over a product it doesn't even produce.

        “I cannot find any unemployed banana farmers in the U.S.,” Mr. Bernal said.

        “That's very different from a dispute like beef,” another issue between the United States and the EC.

        The potential damage to the former European countries from a United States and Chiquita victory has also concerned the Congressional Black Caucus.

        “Chiquita Brands' market share in Europe is already much larger than that of the small Caribbean countries that benefit from the banana regime, and Chiquita certainly does not need the assistance of the U.S. government to market its products,” Rep. Maxine Waters, D-Calif., said in a recent letter to U.S. Trade Representative Charlene Barshefsky.

        Ms. Waters blasted the U.S. decision to impose contingent 100 percent tariffs on European luxury goods.

        “The stability of our Caribbean neighbors is vital to the national interests of the United States. Without a viable banana industry, thousands of Caribbean farmers would have no means of support for their families.”

        While a lot of attention in the banana controversy has been directed at the political influence of Mr. Lindner in Washington — and the millions he has given to the two political parties in the 1990s — European and Caribbean officials do not blame him for looking after his own company.

        “I have nothing against people defending their businesses. That is normal practice,” Mr. Helin, the spokesman for the European Commission, said.

        Similarly, Mr. Bernal, the Jamaican ambassador, said, “He is pursuing his corporate interest.”

        But newspapers in Britain are directing renewed attention at Mr. Lindner.

        The Observer called him a “shadowy” millionaire who is not yet “a familiar name in Scottish border towns” but soon could be.

        In Washington, the British newspaper said, “He is too great an ally of the political machine to be resisted.”

       



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