Since the European Union has opened its market, its preferential treatment toward African, Caribbean, and Pacific (ACP) countries has threatened the entire future of free trade in the global banana industry (Lightner & O’Mara, 1999). The EU’s banana regime gives special duty-free import privileges and guaranteed import quotas to ACP countries apart of the Lome Convention, while those “dollar” bananas, exported here in Ecuador and other Latin American countries, are subject to rigid tariff quotas that have drastically increased the prices of our exports and caused our banana market shares to erode (Dodo, 2014). These policies are in violation of World Trade Organization import rules, and threaten the efficiency of global free trade today. ACP
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Any policies that undermine this reality are seen as a direct threat to the welfare of the local families and households involved in our banana productions. Our economy would essentially collapse without productive banana industries, and considering Latin American producers already have an agricultural comparative advantage, preference in EU trade policy is greatly beneficial to our success and development outside of overseas aid (Barkham, 1999). The industries in our countries are fragile, and if their preferential treatment is taken away without the appropriate time and resources, we will not be able to adequately adapt to the forces of the free market. What is likely to happen with unrestricted free trade, is an increased monopolization of the banana trade by huge multination corporations like Del Monte, Inc. and Chiquita, leading to worsened human rights violations and higher prices for consumers (Lightner & O’Mara, 1999). Even those independent consumers in Latin America, who are currently struggling to compete with the multinationals in the current system, would also be adversely affected (Lightner & O’Mara, …show more content…
This effectively limits the number of Latin American bananas EU nations can import, creating a protectionist policy that is inconsistent with World Trade Organization regulations (Spiegel, 2000). While the US government is not involved with the banana market directly, in defense of MNC’s that heavily influence the banana trade in Latin America, they retaliated by imposing sanctions on certain EU imports, and formally reported their complaints to the World Trade Organization. The EU responded by proposing new banana regimes trade more compliant with WTO obligations, but these changes are still ineffective and do not maintain the existing market access for non-preferential banana suppliers in Latin America (WTO). There has been years of this back and forth between the EU, WTO, and the US government, and until the EU complies and a new agreement is reached, the Banana Trade War will
Any policies that undermine this reality are seen as a direct threat to the welfare of the local families and households involved in our banana productions. Our economy would essentially collapse without productive banana industries, and considering Latin American producers already have an agricultural comparative advantage, preference in EU trade policy is greatly beneficial to our success and development outside of overseas aid (Barkham, 1999). The industries in our countries are fragile, and if their preferential treatment is taken away without the appropriate time and resources, we will not be able to adequately adapt to the forces of the free market. What is likely to happen with unrestricted free trade, is an increased monopolization of the banana trade by huge multination corporations like Del Monte, Inc. and Chiquita, leading to worsened human rights violations and higher prices for consumers (Lightner & O’Mara, 1999). Even those independent consumers in Latin America, who are currently struggling to compete with the multinationals in the current system, would also be adversely affected (Lightner & O’Mara, …show more content…
This effectively limits the number of Latin American bananas EU nations can import, creating a protectionist policy that is inconsistent with World Trade Organization regulations (Spiegel, 2000). While the US government is not involved with the banana market directly, in defense of MNC’s that heavily influence the banana trade in Latin America, they retaliated by imposing sanctions on certain EU imports, and formally reported their complaints to the World Trade Organization. The EU responded by proposing new banana regimes trade more compliant with WTO obligations, but these changes are still ineffective and do not maintain the existing market access for non-preferential banana suppliers in Latin America (WTO). There has been years of this back and forth between the EU, WTO, and the US government, and until the EU complies and a new agreement is reached, the Banana Trade War will