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. Last Updated: 07/27/2016

U.S. Fires First Banana War Shot




WASHINGTON -- With an impeachment trial looming and the conflict with Iraq temporarily subsiding, the White House chose to fire its first salvo in the banana war.


After months of threats, President Bill Clinton's administration announced that in retaliation for Europe's refusal to open its market to bananas shipped by two U.S. companies - Dole Food Co. and Chiquita Brands International, which is controlled by Carl Lindner, a major contributor to the Democrat and Republican parties alike - it would impose 100 percent tariffs on a variety of European-made products.


The sanctions will begin as early as February, the administration insisted, unless Europe backs down in a dispute that stretches back six years. And the list of European products slated to soar in price could send a chill through upper market U.S. stores.


Louis Vuitton handbags are on the list. So is pecorino, a hard, sharp Italian cheese, "in original loaves, not suitable for grating." European-made cotton bed linens are subject to the huge tariffs, along with "sweaters, pullovers, sweat shirts, waistcoats and similar articles," although only those made "wholly of cashmere."


Perhaps mindful of not harming the president's job-approval ratings in the holiday season, U.S. Trade Representative Charlene Barshefsky kept all wine off the list. But she included European-made bath salts, tapered candles and Mont Blanc pens, a step that one senior administration official said Monday would "hit them where it hurts."


One might think that amid impeachment and war, policy-makers would give scant attention to the banana trade. But the White House insists that Clinton spent a considerable part of Friday dealing with the banana dispute, even as the House of Representatives debated the impeachment articles against him.


At lunch with the leaders of the European Union, Clinton threatened to approve the sanctions unless the Europeans relented on banana quotas that the World Trade Organization has ruled several times violate international trading rules. Eager to show that the president was not consumed with his own troubles, White House aides offered reporters details Friday of how Clinton jousted with Sir Leon Brittan, Europe's insistent trade minister.


Alluding to Brittan's accent, the president declared that "the only thing that makes this discussion almost tolerable is listening to you pronounce 'bo-non-nas."'


But in the end, Clinton had no more success persuading the Europeans to relent on bananas than he had in persuading moderate Republicans to vote against impeachment. The difference is that in the banana dispute, Clinton had an immediate way to strike back, which is exactly what he did Monday.


U.S. officials insist that more than bananas is at stake - although they admit, somewhat sheepishly, that their tough-minded sanctions will scarcely protect any American jobs. Dole and Chiquita grow almost all of their bananas in Ecuador, Guatemala, Honduras, El Salvador and Nicaragua.


"What's at stake here is the credibility of the World Trade Organization," insisted Peter Scher, chief U.S. negotiator on agricultural issues. "This is the first case in which any country has essentially refused to comply with rulings of the WTO. Even the Japanese, when they lose a case, sit down and negotiate a solution.


"If we cannot demonstrate that there is a price to pay for refusing to comply with the WTO, then there is no incentive to use this system."


Brittan, in a statement issued in Brussels, Belgium, shot back that the United States was threatening "European firms and jobs, which have no link with the banana dispute whatsoever."


"It is difficult to think of a more obvious breach of the multilateral trade system than to take the law into your own hands in defiance of the WTO rules," the trade minister said.


The banana battles have for years been fought with tremendous passion - much like the arguments with Japan over rice (which were also under way Tuesday after Japanese farmers persuaded their government last week to put 1,000 percent tariffs on imports) and with Canada over wheat.


There is little question that Washington has a good case. The United States has won several challenges to Europe's complex quota system, which the WTO has declared blatantly discriminatory, intended to assure that European concerns get the advantage in bringing Latin American and Caribbean bananas into the continent.