The Banana Trade Wars

The "banana trade wars" refer to a complicated confict over European rules for governing banana imports. Europe consumes about one-third of the world's banana trade and has been the most profitable banana market in the world. The banana trade wars, which are continuing, have a major impact on workers in Latin America and small farrmers in the Caribbean.

[Note: Banana trade is not impacted by U.S. Free Trade Agreements with Central America or Andean countries because bananas already enter the U.S. without trade restrictions, e.g. without duties or quotas.]

In 1994, Chiquita persuaded the U.S. government to file an international complaint against the European Union (EU), charging that the EU was giving preferential trade access to former colonies in the Caribbean and Africa to the detriment of Latin America, where Chiquita had most of its operations. The fight over the complaint, taken up by the World Trade Organization (WTO), became known as the "banana wars."

On January 1, 2006, in response to a WTO ruling against its previous system, the EU initiated a controversial new system under which it imposed a duty of 176 Euros on each ton of bananas from Latin America. The new system has been denounced by banana worker unions, Caribbean producers, Caribbean governments, and most Latin American governments. Latin American governments and companies with significant investment in Latin America believe the duty is too high and deprives them of markets in Europe. Caribbean countries and small producers believe it is not high enough to protect them from further damage. The new system is now being challenged at the World Trade Organization, which has issued initial rulings against it.

Perhaps most important to Latin American banana workers, the new system also eliminated a licensing and quota system in favor a free market approach. Under the new system, the European banana market is becoming more competitive and less profitable for banana companies, fueling the race to the bottom.

While the banana trade wars have pitted countries against each and companies against each other, small farmers in the Caribbean (WINFA) and workers in Latin America (COLSIBA) have sought to find common ground, advocating for trade rules to protect both of them. They jointly sponsored the second International Banana Conference in 2005 to address the "race to the bottom." Papers prepared for the International Banana Conference provide additional background on the banana trade wars.

The World Banana Forum was established in 2009 to bring together stakeholders  including unions, farmers, producers, multinationals, retailers, governments, and non-profit organizations in an effort to address sustainability issues inthe banana sector.