The Miami Herald
April 1, 1999
Caribbean nations accuse U.S. of breaking vow on banana sales

             DON BOHNING
             Herald Staff Writer

             Escalating their offensive against a U.S.-led effort to end preferential treatment in
             the European market for their bananas, Caribbean countries are accusing
             President Clinton of reneging on a 2-year-old promise and threatening retaliatory
             action of their own.

             While Washington and the Caribbean have their differences over criminal
             deportees, drug interdiction, Cuba, reduction of U.S. assistance to the region and
             the failure to obtain enhanced trade access to the U.S. market, nothing rivals the
             region's anger and sense of betrayal over the Clinton administration's position on
             the banana issue.

             Caribbean leaders, meeting at a summit in Suriname in early March, bitterly
             criticized the U.S. action and decided to ``review'' a wide-ranging cooperation
             agreement they signed with President Clinton in Barbados in May 1997.

             ``What has prompted the United States administration to take so hostile a position
             to countries as small as we are and as vulnerable as we are?'' Jamaican Prime
             Minister P.J. Patterson asked some 300 hemisphere media representatives
             attending last week's spring gathering of the Inter American Press Association in
             Montego Bay.

             The U.S. position, said Patterson, presents ``a very, very serious threat not only to
             the banana-producing countries'' but other Caribbean nations as well.

             St. Lucia, St. Vincent and Dominica, as the major Caribbean banana producers
             and exporters to Europe, would be most affected by the loss of a preferential
             market in Europe. Bananas account for 80 percent of Dominica's and 60 percent
             of St. Lucia's export revenues and about half the jobs on both islands.

             Caribbean leaders warn that without a transition period to replace jobs and
             revenues lost from their banana industries, some islands face economic collapse
             that could lead to social and political unrest, large-scale migration and increased
             vulnerability from drug traffickers.

             The United States, joined by five banana-producing Latin American countries,
             won a favorable decision from the World Trade Organization in 1997 on its
             complaint against Europe's preferential treatment for bananas coming from former
             European colonies in Africa, the Caribbean and the Pacific. Of those, the
             Caribbean is the biggest supplier, with about 8 percent of the European market.

             U.S. banana companies operating in Latin America have about 60 percent of the
             European market.

             After the ruling, the European Union revised its banana import rules, effective Jan.
             1, but Washington complained that the revisions were only cosmetic. It then
             announced unilateral imposition of 100 percent punitive duties totaling $520 million
             -- the estimated trade loss to U.S. banana companies -- on a wide range of
             European imports effective March 3, the date a decision was due from a WTO
             disputes settlement panel.

             The panel asked for an extension, with a decision now due in mid-April, but
             Washington began imposing provisional tariffs against European Union imports
             March 3, much to the anger of the Europeans.

             Washington claims its actions are in the name of free trade. Caribbean leaders
             suspect it has more to do with domestic U.S. politics. They note that Carl Lindner
             -- controlling stockholder of Ohio-based Chiquita bananas, which operates
             plantations in Latin America -- is a major contributor to both the Republican and
             Democratic parties.

             The issue, says Richard Bernal, Jamaica's ambassador in Washington, ``has
             seriously strained U.S.- Caribbean relations .  . . . In every free market,
             governments make allowances for vulnerable producers such as small farmers and
             small businesses without violating the operation of free markets.

             ``Given that the Caribbean accounts for 2 percent of the world market and about
             8 percent of the European market it is possible to accommodate Caribbean
             exports without disrupting the free market in bananas,'' Bernal says.

             ``Our WTO case is against the European Union, not the Caribbean countries,''
             countered a State Department official, who asked not to be identified.

             ``We support tariff preferences for the Caribbean and will seek to ensure that they
             are included in any package that we negotiate with the European Union,'' the
             official added. ``We believe we can find a WTO-compatible solution and have
             consulted with the Caribbean countries on this. We stand ready to consult again.

             ``We're not trying to eliminate Caribbean bananas. The question is whether you
             are going to have rules or not.''

             In addition to Patterson's appeal to the media, Eastern Caribbean ambassadors in
             Washington met last week with members of the Congressional Black Caucus in an
             effort to mobilize congressional support. Eastern Caribbean representatives are
             seeking a meeting with President Clinton.

             Caribbean leaders said the decision this month to review the Bridgetown Accord
             reached at their May 1997 summit with President Clinton is being undertaken ``to
             determine the basis for continued cooperation'' with the United States on a variety
             of subjects, ranging from trade to drug trafficking.


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