Tuesday, February 19, 2008

The Law of Bananas

What is it about bananas? In addition to being the source of humorous (and not so humorous) jokes, this single fruit has created empires, and single-handedly financed the careers of many of us in international trade law! In the interest of full disclosure, I’ll admit that a few months ago I was hired for a U.S.-funded project to aid Ghana in developing its banana export program. But the Banana Trade Wars has been around long before I was. And less than two weeks ago, the WTO handed down yet one more decision in an ongoing saga. What is it all about?
Bananas are a crop like no other. For some developing countries, international trade in bananas represents no less than the economic lifeblood of a nation. But since 1993 the European Union, the second biggest importer of bananas in the world, has sought to regulate imports of the crop. It adopted a Byzantine system of quotas, country-specific quota allocations, tariffs, licenses and preferential duties, which purportedly sought to provide price stability in the EU while also providing a reliable, consistent and profitable market for some African Caribbean and Pacific countries (ACP). The problem is that the EU’s system pits ACP countries against Latin American countries, small suppliers against major ones, and Chiquita bananas against the European Commission.
The matter has been the subject of dispute ever since the good old days of GATT, and in 1995 the United States resurrected the question once more by filing a claim in the WTO. The EU has consistently lost, and it has continued to tinker with its system without a full overhaul. On Feb. 8, it lost again. When will it all end?

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