The Politics of Banana
Those who know Edison James, the Prime Minister of the eastern Caribbean island of Dominica, say he’s a man with a tendency to tread where angels fear to. When he mounted the podium at a public meeting in London last November, he acted through to this sobriquet. His keynote speech was on banana, but he soon shot across the bows of the United States, which he accused of meddling “on issue that it has no vital [economic] interest.”
“We are talking about the very survival of people in the Caribbean,” he told his audience, which included fellow eastern Caribbean leaders from St Lucia and Grenada. “We ask for fair trade. But we say people should not be sacrificed on the alter of free trade.”
James’ anger at the United States was not unexpected. For the first time in five years, his country has experienced a dip in economic output, a situation many analysts attributed to the falling revenue from banana export, the island’s lifeblood. Worse is predicted, as America piles up pressure on the European Union to do away with its banana regime - a regime that guarantee Caribbean growers a slice of cake in the plumy Europe’s markets.
The issue in dispute is European Union’s preference of the Caribbean banana over that of anyone else’s. It was part of a trade and aid agreement that has become known as the Lome Convention. The Lome agreement was signed in 1975 between the EU and its former colonies in the ACP (acronym for African, the Caribbean and the Pacific). The ACP has about 70 members. Seven of the major ACP banana producing countries are in the Caribbean, while Ivory Coast leads the pack in Africa. All together, the Caribbean controls a mere 8% of the 3.7 million tonnes annual banana trade with the EU. This works out - in monetary terms - as $300 million.
Everyone seemed contented with this arrangement until September 1994 when Chiquita Brands, a multinational company, and four Latin American countries enlisted the support of the United States in its complaint to the World Trade Organisation (WTO) about this “discriminatory” EU banana policy.
When Chiquita first took its complaint to US Trade Representative Mickey Kantor, in 1993, few people believe the US would take up the case. Chiquita was not a US company and employed few US citizens. People also felt that Washington would not risk a confrontation with its Caribbean allies by giving backing to the company. But Chiquita Chairman Carl Lindner - a leading Republican sympathiser and veteran in the give and take politics of America - knew what he had to do. He began heavily oiling the greasing the Democratic Party machinery. According to the leading American weekly, Newsweek, at the height of the banana dispute, no less than $1 million was ferried to the Democratic Party to help Bill Clinton “carry on his good policies.” Lindner’s benevolence sealed the fate of the Caribbean growers, and, with direct pressure form the United States, it was only a matter of time before the WTO made mincemeat of the EU banana regime.
In its ruling delivered in September, 1997, the trade body tore through the Lome pact and chastised the EU for “violating” the spirit of free trade which it has helped to set up. The EU appealed against the ruling, but its appeal was fed through the shredding machine. “It seems that we were a party to the creation of a veritable monster, rather than a structure which would promote our economic development,” a frustrated Edison James lashed at the WTO.
In the wake of the ruling, observers argue that by concentrating on a single crop, the Caribbean - with the support of the EU - may have unwittingly sown the seed for its own social and economic collapse. It’s been more than a quarter of a century since the Caribbean countries replaced the colonial flags with their own. There has therefore been ample time and opportunity, to re-focus its external economies. But the dearth of vision meant the region had to cling on to the discredited colonial trade arrangement - where bananas are produced almost solely for the British market.
According to David Francis, of the London-based St Lucia Association: “Our heavy reliance on the production of a single traditional crop grown primarily for export to the UK is mired in colonisation, and has fostered dangerous socio-economic dependency [of the region].” Francis is right, of course. 80% of the $300 million the Caribbean earns from the EU markets every year comes from Britain. It was not surprising, therefore, that the UK was the first port of call for the Caribbean leaders in their fight back against the WTO ruling.
The British government, in turn, obliged with - if anything - verbal support. “I give you my assurance,” said the then Agricultural Minister Jack Cunningham, at the opening of Geest banana ripening centre in Coventry, last October, “that Britain is in no doubt about the vital importance of the windward islands’ banana industry. We shall continue to do everything we can in Brussels and elsewhere to ensure the interests of the Caribbean growers are fully recognised in future negotiations.”
However, his words offered little solace. Last July, after four days of “intensive” negotiation in Brussels, EU farm ministers announced the abolition of the banana policy, and replaced it with a graduated quota system. From now on, only 857,700 metric tonnes from twelve ACP countries would be exempted from future import levy, while the rest - 1.67 tonnes million - would be thrown up to competition. The new ruling has accommodated Chiquita, and all is now quiet on the American front.
“This is one of the most complex and politically-sensitive packages of measures to come before the council in many years,” says Franz Fishler, the EU Farm Commissioner. Fishler is right. For the Caribbean, the stakes could not have been higher. In the line of fire are the eastern Caribbean islands of St Lucia, St Vincent, Grenada and Dominica. In St Lucia, banana accounts for 89% of agricultural exports, while the figures for St Vincent and Dominica are 70% and 83%, respectively. Altogether, the four islands are expected to lose a cool EC$3 million as a result of the new ruling.
Others in the line of fire are Jamaica, Belize and Suriname. Jamaica, which had a quota of 110,000 tonnes under the old banana regime, could see its earning cut from its peak of $48 million in 1995. Says Keith Mitchell, Grenadian Prime Minister: “If those who are taking decisions on the issue of banana have their way, it will have untold damage to the social and economic life of islands in a manner that we probably have never seen in the past.”
Mitchell is not being alarmist. In fact, whilst the wrangling over the EU banana regime was going on, another big Caribbean industry - the textile industry - was quietly losing ground in the American markets. The enemy this time is Mexico which is cashing in as a member of the North American Free Trade Agreement, an economic union between itself, the US and Canada. In the last 3 three years, 150 Caribbean apparel plants have closed shop, with the loss of 123,000 jobs - mainly in Jamaica. “The Caribbean is in trouble,” Bernie Grant, MP for Tottenham declared, gravely.
Already people are talking about banana growers moving en-masse into the lucrative narcotics trade. According to the United Nations Drug Control Programme, some 100 tons of cocaine shipments to western Europe currently pass through the Caribbean ports, while the US anti-narcotic service say 40 per cent of crack cocaine reaching its cities are coming through the Caribbean basin.
“Our friends in the international community have been telling us that they care about us, that they are concerned about the flow of narcotics in the Caribbean region,” lamented Mitchell. “I found it extremely difficult to understand the logic. If we entertain the destruction of the banana industry in the Caribbean, I don’t know how you can stem the flow of narcotics in the region.”
Diana Abbott, MP for Stoke Newington, also believes it was a simple case of arithmetic. “The truth is that in rural Jamaica, when the prices for banana fall through the floor, there is a danger that the population may turn to illegal drug production.”
Against this background, however, Caribbean leaders are still upbeat in their assessment of the industry. “The message is simple,” declared Kenny Anthony, St Lucian Prime Minister. “The banana industry will survive. But it cannot survive without reform to transform the it and without reliance on our traditional friends.”
One “traditional friend” Anthony has in mind is Britain which continues to support the efforts of the Caribbean leaders - at least in principle. “We need to emphasise that Caribbean bananas are produced on small holdings by small farmers in good conditions, while the central American bananas are grown on large plantain where workers are badly paid and endure poor working conditions,” said George Foulkes, international development minister.
Transformation has begun in the industry and reforms are being carried out to improve both its quality and the competitiveness. In Dominica, banana growers are being assisted under a scheme aimed at boosting farm output. “Farmers producing top quality fruits will be eligible for additional cubic yards of land,” announced Gregory Shillingford, Head of Dominica Banana Marketing Corporation.
The region is also striving to improve the marketing and distribution methods of the fruit. For example, alliances are being forged between banana growers and leading UK supermarkets to encourage more direct selling to the British consumers. Tesco and Sainsbury’s - who between them control 75 per cent of supermarket sale of banana in the UK - are known to have sent representatives to the Caribbean to explore future co-operation.
But by far the most important suggestion on reform is the need to expand the economic based of the region. Known by economists as diversification, proponents says it’s the best way forward for the Caribbean. Explained Owen Arthur: “For a region weaned on preferential economic and financial treatment, the first and most urgent adjustment that is required is the crossing of a major psychological barrier.... Our participation in the new global order will require a drastic reformation of our development strategy, particularly regarding the emphasis on production.”
To this end, the US is promising the region $5 million towards diversification, while additional $2 million is being offered for manpower training and rural development. Not to be outdone, Britain is offering to write off $25 million from the region’s external debts. The gesture will benefit both Jamaica and St Lucia.
Again, within the region, there is talk of setting up an investment fund to help breathe new life to the prostrate tourism sector. According to Percival James Patterson, Jamaican Prime Minister: “For the region to attract the level of funds which it needs, a Caribbean investment funds must be regarded as an essential vehicle to mobilise and channel funds.”
At the Caribbean Community heads of government summit last June, leaders approved a plan to aid free movement of people, money, goods and services in the region. They also took steps to encourage Caribbean firms to look beyond the traditional export markets, such as western Europe, and tap into emerging markets around the world. “Our trade and economic relations can no longer be based largely on geography, and even less so on historical sentiments,” declared Barbadian prime minister. “The Caribbean must seek markets whenever they exist in what is increasingly becoming a global market.”
The Caribbean is certainly at the crossroads. Making a transition from centuries-old dependency on banana and on the British market will not be easy, yet it’s a barrier that must be crossed. In the words of Arthur, “It is one of the conditions of men in a free state that their roles must constantly change.” It now remains to be seen if the Caribbean has the will to make that change.