The Banana: Empires, Trade Wars, and Globalization

6. The Single European Market and the Western Hemisphere's Banana Industries

Bananas have been a problematic issue for the EU since its inception as the European Economic Community ( ). The Treaty of Rome that established the organization specified that the original six member states of the European Community ( ) had until to adjust their banana importation policies to conform to the standard imposition of a percent tariff on foreign bananas. That outcome was not easily achieved. The Benelux states had to raise their tariffs, meaning higher prices for consumers. Italy was forced to lower the percent tariff it assessed on all bananas except those from Somalia. West Germany, the ’s highest per capita consumer of bananas, was granted a duty-free banana import quota, enabling it to continue tariff-free import of the cheaper Latin American bananas favored by German consumers. Among the six original members , three—France, Italy, and the Netherlands—had banana-producing colonies that would soon become independent countries. The organization grew from six countries to twelve by the time negotiations on the Single European Market began in the late s, , J^[
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?dZkijh_[i | International Banana Trade and the complexity of the banana issue grew with it. Britain’s entry into the was especially significant because the UK had special trade relations with several banana-producing former colonies. The three newest members—Greece ( ), Spain ( ), and Portugal ( )—had their own banana-growing regions. Thus, six of twelve members produced bananas or had former colonies that did, or both. A seventh—Ireland—was the home base of Fyffes, a large importer of bananas into Europe. By the early s the twelve members of the collectively comprised the world’s leading banana market, increasing the importance of the industry. It was clear that developing a joint policy for importing bananas—as mandated under the —was not going to be an easy task. This chapter discusses the arduous process of bringing bananas within the , the policy devised to do so, reactions to that policy, and the EU’s early efforts to implement the policy, which provoked varied responses on four continents. Fh[#
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C[cX[hi The pre- EU banana market is best described as fragmented, with each member state having its own banana trade policy. The fragmentation reflected the three major source areas from which European consumers obtained bananas and the relationship of each member state to those areas. The source areas were (and are) the EU itself, countries, and “third countries” (the EU’s term for countries other than EU and exporters), mostly in Latin America. The twelve members’ policies can be grouped into four categories. Spain stood alone in its own category, protecting its market for its Canary Islands producers. It employed a strict quota on bananas from elsewhere , importing only when demand could not be satisfied internally . France, the UK, Greece, Italy, and Portugal comprised the second category and used a system of preferential access for internal or production. France protected its market for bananas from its internal producers, Guadeloupe and Martinique, and from Cameroon, The Single European Market | Ivory Coast, and Madagascar, three exporters with whom it had a special relationship. Britain and Italy had no internal production but provided preferential access to exports from Belize, Dominica, Grenada, Jamaica, St. Lucia, St. Vincent, Suriname (to Britain), and Somalia (to Italy). Greece protected its market for internal production from Crete, and Portugal did so for bananas from the Algarve, the Azores, and Madeira. The five countries imported third-country bananas to fill their remaining demand, applying the percent tariff to those imports (European Commission ). The third category included Belgium, Denmark, Ireland, Luxembourg , and the Netherlands, all of whom imported bananas mostly from third countries and applied the percent tariff. Although Suriname was a Dutch colony until , its banana industry was linked to the British market, not to the Dutch, and the Netherlands did not offer preferences to Suriname’s fruit. Finally, Germany’s policy stood alone. The original tariff exemption it negotiated as part of the Treaty of Rome continued until the implementation of the . Thus, German consumers enjoyed a free market and low prices for bananas, meaning that they had the most to lose with any EU importation regime that fell short of freemarket conditions. This factored into the German stance during the negotiations. Summarizing the pre- situation, EU members had twelve distinct...