How free trade fuels 'banana wars'

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One of the major sideshows at the Doha round negotiations in Geneva that collapsed in stalemate at the end of July was the latest round in the âeoebanana wars.âe

Latin American banana exporters have long argued that their significantly cheaper bananas have faced unfair barriers in European markets because of a special trade agreement between the European Union (EU) and its former colonies in Africa, the Caribbean, and the Pacific.

To Lesley Grant, Manager of the Banana Growersâe(TM) Association in the tiny Caribbean nation of St. Vincent and the Grenadines, to talk of âeoecheapâe bananas is âeoenonsense.âe

âeoeSomeone has to pay upfront,âe he says. âeoeThey have to pay in blood or in terms of poverty. Because the person who comes and works for your for less than a U.S. dollar a day, he is giving you his wealth. He is giving you the wealth of his children.âe

Latin American bananas, says Grant, are cheaper for many reasons, including much poorer working and environmental conditions and much lower wages than those in St. Vincent and the rest of the Caribbean. These higher standards have translated into more expensive bananas, which has been economically viable for the industry because Caribbean bananas have been given preferential access to the EU market since the 1970s.

The worldâe(TM)s largest banana exporters in Latin American, along with the United States, have long fought for the EU to eliminate this special trade relationship. As a result, bananas have become a hot button issue at the World Trade Organization, which has consistently ruled against the banana agreement.

In response, the EU has gradually weakened the preferences, and the Caribbean banana industry has gone into serious decline. In St. Vincent, the number of active banana farmers has dropped by 85 per cent since 1992 and rural poverty is becoming increasingly apparent.

With the price of fertilizer, which is petroleum-based, steadily rising, banana farmer Samuel Thomas cannot afford to buy a new bike after 31 years of farming. His neighbour Christopher John owns 4.5 acres of land, close to the average in St. Vincent, but says that banana prices are so low he cannot afford to grow on it.

Instead, he spends half of his year working in Brampton, Ontario while he awaits full Canadian citizenship. Migration abroad is often the only real option for banana farmers and their children.

A final deathblow was nearly dealt to Vincentian banana farmers at the Doha negotiations, when the EU announced its willingness to cut its tariffs on Latin American bananas from 176 euros per tonne to 114 euros per tonne by 2016. The failure of the talks has meant that this proposal has temporarily been shelved. While world trade officials have responded to the collapse of Doha with alarm, in St. Vincent the response has generally been a sigh of relief.

World trade negotiations, says Wilberforce Emmanuel, a local activist and banana farmer for 40 years, will do nothing to fight poverty or solve the current global food crisis as they ignore the needs of small farmers. Food security is not just about low food prices, but requires viable livelihoods for small farmers to ensure that they stay in farming and that they are paid enough to meet their own food needs.

The World Trade Organization, says Mr. Emmanuel, is concerned only with liberalizing food markets and its agenda is driven by the interests of âeoelarge multinational corporations that are able to finance government.âe

This popular sentiment is echoed in government in St. Vincent and the Grenadines as well. The policies of the World Trade Organization âeoehave ravaged the countryside,âe says Prime Minister Ralph Gonsalves, who adds, âeoeThat is why we have had to rapidly diversify into services, including tourism and information technology.âe

At the heart of the governmentâe(TM)s diversification strategy has been major infrastructure projects, including starting the construction of a new international airport with significant assistance from Cuba and Venezuela, and increased public spending. The results, says Prime Minister Gonsalves, have been major gains in poverty reduction and education âe" child enrolment in secondary schools in the country has increased from 39 per cent in 2001 to nearly 100 per cent by 2005.

Yet despite the positive social gains from the governmentâe(TM)s domestic policies overall, poverty in rural areas remains high and many banana farmers on are the verge of collapse. Prime Minister Gonsalves worries that further liberalization of the European banana market could prove highly destructive to the nationâe(TM)s economy.

âeoeItâe(TM)s not easy,âe he says, âeoeto be on the front line of globalization and trade liberalization.âe

While trade liberalization has been temporarily slowed by the collapse of the recent negotiations, the EUâe(TM)s proposal to cut its tariffs on Latin American bananas is still up for discussion and there is little sense of optimism about the future of Caribbean bananas.

The liberalization of the European banana market, says Cecil Ryan, Chairman of the St. Vincent Banana Growersâe(TM) Association, is not a good deal for small farmers, âeoebut one has to deal with reality.âe This reality is shaped by the interests of rich countries and multinational corporations, not poor farmers. âeoeThe WTO is making decisions in the interest of other stronger forces,âe says Mr. Ryan. âeoeThatâe(TM)s the way it is.âe

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