Banana wars and the fraud of “free” trade

The announcement in December of a deal to end the so called "Banana Wars" is not unqualified good news. Instead, it should instruct us as to the nature of so called "free" trade.

The "Banana Wars" started in 1993 when the European Union came to an agreement with a group of African, Caribbean and Pacific (APC) countries, all former European colonies, to allow their bananas to be admitted to Europe duty free, while slapping high tariffs on banana producing countries outside this group.

The favored countries included Cameroon, Ivory Coast and Ghana in West Africa, and the Dominican Republic, Belize, Jamaica, Surinam and the Windward Islands in the Caribbean area, as well as the French colonies of Guadeloupe and Martinique.

The disfavored countries, basically excluded from European sales by the high tariffs, included Colombia, Honduras, Ecuador, Guatemala, Costa Rica, Panama and others in Central and South America.

In a number of the latter countries, the production of bananas is dominated by large, U.S. based monopolies: Chiquita, Dole and Del Monte. These corporations own large estates, whereas in many cases in the countries favored by the 1993 EU-APC deal, bananas are grown by smaller scale independent farming operations.

At any rate, the major banana monopolies and the Clinton Administration, supported by the Central and South American countries, sued the European Union under the terms of the General Agreement on Tariffs and Trade (GATT), the suit later being transferred to the World Trade Organization (WTO). It is this legal action that is supposedly settled by this month's deal, whereby the APC countries' bananas will continue to come in to Europe duty free, but the bananas from the non APC (i.e. Latin American) countries will pay a lower tariff (reduced over 7 years from $256 a ton to $116 a ton, eventually). Click here: and click here:  The APC countries will be compensated with an aid program.

Various media commentators reporting on this issue have attributed the lower prices of bananas grown outside the countries favored by the deal to economies of scale, due to the larger scale production in monopoly-owned operations. But there is more to it than that.

Companies like the United Fruit Company (ancestral to Chiquita Brands International) built up their massive landholdings and their monopolies of production by fair means or foul, sometimes using violence to break unionization movements and strikes on the part of banana workers. In Aracataca, Colombia in 1928, hundreds of banana workers were massacred by troops brought in to break up a strike against United Fruit. (This is the central event in Gabriel Garcia Marquez' novel "A Hundred Years of Solitude").

And this not a story of things long past. Right now, there are accusations, on the part of demobilized right wing paramilitaries, that both Chiquita and Dole have hired paramilitaries to violently repress and even kill union activists who threatened their profits. Prosecution in the US led to a 2007 guilty plea by Chiquita, and a $25 million fine. But civil litigation is ongoing. (https://nacla.org/node/6315)

In Guatemala in 1954, United Fruit felt its profits threatened by enlightened labor and land reform policies of President Jacobo Arbenz. Among its stockholders were two powerful brothers: U.S. Secretary of State John Foster Dulles, and CIA Director Allen Dulles. They arranged a coup which overthrew Arbenz and set Guatemala on a path of strife that would eventually cost up to 200,000 innocent lives.

Thus the ability of the big U.S. based companies to produce cheaper bananas is not just due to economies of scale, but even more to a regime of repression and union busting in the countries where those companies have their biggest operations. And the U.S. government has often backed these actions.

This throws new light on the concept of "free" trade. Whose freedom is involved? Obviously, not that of banana workers in places like Honduras where for the umpteenth time, a coup has put labor and land reform in doubt.

ACP countries are complaining that the new deal harms them and favors U.S. based transnationals. On the other hand, some of the countries formerly excluded by the European Union tariffs, such as Ecuador, Nicaragua and Guatemala, are now run by more progressive governments which are trying to improve conditions for their workers and farmers. To be excluded from the huge European banana market does not help them, either. So going back to the original arrangement is not the answer.

The whole issue of foreign trade has to be re-thought on a completely new basis, that favors the rights of workers, small farmers and other regular folks above the profits of bloodstained monopolies.

 

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