Plea for the means to ‘earn our own way’

Date: 17/10/1996

By Michael Mann

THE outcome of the World Trade Organisation dispute settlement panel into the EU's banana import regime will determine not just the economic, but also the social and political future of the eastern Caribbean states.

This is the stark warning from Edwin Laurent, ambassador to the Union for the group of island states.

“Our banana trade is the basis of our continuation in the international trading system. This is an arrangement whereby we receive from Europe the ability to earn our own way in the world, rather than sitting back being mendicants,” says Laurent, adding: “We simply could not export without the preferential system.”

Laurent was speaking before he and colleagues from the African, Caribbean and Pacific (ACP) countries travelled to Geneva this week for the second hearing on the action brought by the US with the support of Ecuador, Guatemala, Honduras and Mexico.

They claim the preferential access to the market enjoyed by ACP producers has damaged the national economies of the Latin American states and undermined the profitability of multinational companies including Chiquita, which originally instigated the action.

But Laurent argues that the gains the Latin Americans would actually make if they won the case are minimal in relation to the serious effects the loss of special status would have on eastern Caribbean farmers.

In the Windward Islands, 25&percent; of the total labour force is involved in the banana trade. In Dominica, bananas make up 20&percent; of gross domestic product.

“But these statistics do not tell the whole story. In many rural areas, there is no alternative employment. The only alternative - subsistence agriculture - would be terrible for the island ecology,” stresses Laurent.

Another option is drug production, he claims, suggesting there is a real danger that the islands could fall into the clutches of drug cartels, something which would be unlikely to please EU governments.

“If the banana industry collapses, we will not only lose 25&percent; of the labour force. Without it, these islands will not be the tranquil tourist paradise everyone imagines. The tourist industry would disappear and we would have crime and instability,” he warns.

The states Laurent represents simply cannot compete with the Latin Americans on cost grounds, he says, pointing to the small-scale family farms which produce bananas on the islands.

“We could have lowered costs substantially, but we have a system of family production, with respect for workers' rights and much more environmentally-acceptable methods.”

Besides the compelling social and economic arguments for maintaining the preferential arrangements, Laurent stresses that the Union is tied to respecting them by its commitment to the Lomé Convention.

“Lomé obliges the EU to continue preferences which we have traditionally enjoyed. Europe agreeing to continue giving us assistance is an indication that it is willing to support the type of production we are engaged in,” he says.

So far, the panel has not progressed as smoothly as Laurent and his colleagues would have liked. Their request for full participation refused, the ACP countries have had to content themselves with observer status, leaving it to the European Commission to defend its import system.

Laurent was angered by the panel's ruling that ACP legal advisers could not attend its sessions because they were not permanent government officials. “If small countries are denied the right to have such advice, this will entrench the disadvantages they already have at the WTO,” he claims.

Just as bad, in his eyes, was the composition of the three-man panel, which includes officials from Hong Kong, Australia and Switzerland.

“When such an investigation concerns a developing country, you would normally expect at least one official from a developing country on the panel,” he says.

Laurent maintains he does not understand the motives of the countries which have challenged the controversial system. Despite talks with the US, “it still claims the regime is aimed at helping EU companies rather than us”, he says.

It is no secret that a number of member states are far from happy with the system themselves and are seeking to have the tariff quota for Latin American 'dollar' bananas increased.

Laurent rejects the idea that this undermines the Commission's ability to defend the system. “I am sure the banana regime is not the only issue on which there is not a consensus among member states,” he says.

He also denies that internal divisions will affect the long-term security of the regime, describing the idea of raising the quota to three million tonnes as “an absurdity” and concluding: “The market would be flooded and prices would collapse. When more bananas were imported into the Union in the summer, prices fell to an all-time low.”