Bringing an end to 'banana wars'

The Great Banana War may be one of the more absurd trade disputes to have set America and Europe at each other's throats, but it could be one of the last of its kind, as well.

Early this month, the United States began imposing 100 percent duties on a range of luxury imports from the European Union. The action makes the targeted goods prohibitively expensive in retaliation for the way Europe favors banana imports from its former Caribbean colonies over South American bananas grown by US companies such as Chiquita.

The targeted goods, worth $520 million, range from cashmere sweaters made in Scotland to French handbags, Greek feta and Italian pecorino cheeses, and German coffeemakers.

Whether the EU banana import regime is in line with rules set by the World Trade Organization (WTO) is still a matter of dispute. But behind all the arguments about how many thousands of tons of bananas should be subject to which import tariffs lies a decades-old sense of guilt.

Europe gives preferential treatment to Caribbean banana exports for the same reason that it gives hundreds of millions of dollars in development aid each year to its former colonial possessions.

"Historical links were created over time, which were not links of cooperation but between colonizers and colonies," says Maria van Dunem, a spokeswoman for the European Commission, the EU's executive arm.

So the EU guarantees the tiny Caribbean island of Dominica, for example, that it will be able to sell so many bananas in Europe each year, which guarantees Dominican banana farmers' livelihood.

But this infuriates rival banana producers, and EU leaders have concluded that it is not necessarily the best way to help Dominica make its economic way in the world, either.

Rather than encouraging ex-colonies to keep their colonial, raw-material-dependent economies on artificial support to survive, Brussels is working on ways of weaning them off export quotas and duty-exemptions, and into new fields of business and trade.

When the current agreement between the EU and the African, Caribbean, and Pacific (ACP) group runs out next year "we plan to work out a new cooperation structure," says Ms. van Dunem.

"The reality is that preferential treatment for the ACP countries will have to end," she adds. "We'll ask the WTO for some special-case exceptions, but little by little they will have to start playing by the rules, and they have to get ready to manage under those new rules."