Going for Broke: The Corporate Players Behind the Demise of the Caribbean Banana Trade (Part 1)

Kevin Edmonds

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Since the adoption of the European Union’s Single Market for Bananas in 1993, Caribbean banana farmers have faced a permanent state of uncertainty and declining prices. Despite being an industry historically rooted in highly unequal terms of trade, the banana trade did bring forth a degree of stability and genuine, albeit relative economic development to the Caribbean, supplying governments with their primary source of income.

All of this changed with the creation of the World Trade Organization (WTO) on January 1, 1995. Despite only contributing 2% of the global banana trade, the tiny Windward Islands of the Caribbean and their protected trade with England became the primary battleground for sanctity of free trade. The WTO lead an all out assault on the nearly 50-year-old arrangement. In several rulings regarding the "legitimacy" of such protected trade agreements, the WTO decided that despite being the economic backbone of several nations, in the new era of free market fundamentalism the Caribbean banana trade was too inefficient to exist. The WTO ruled against the Caribbean banana producers, arguing that European tariffs against Latin American bananas contravened the new trade regime.

In the ideological universe of the free traders, this was regarded as a positive development as the small Windward Islands of the Eastern Caribbean (including St. Lucia, St. Vincent, Dominica and Grenada) could now discover what industry would yield their true comparative advantages. Yet in an act of arrogance, reality refused to correspond with the theoretical predictions: the countries' economies were destroyed and no additional industry emerged to take its place. Unemployment, crime, poverty, and migration increased as the number of banana farmers fell. The powerful refused to acknowledge their devastating mistake as the United States moved in to lay claim to the Windward Island’s former market.

In this particular case, the destruction of the Caribbean banana trade though the WTO’s trade rulings particularly benefited multinational fruit corporations. To put this into perspective: Bananas are the fourth most imported food staple in the world, and the fifth most traded agricultural commodity after cereals, sugar, coffee, and cocoa. The banana industry has long been famous for the power and influence multinational corporations yield upon governments, developed and developing alike. Despite bananas being grown in nearly all tropical regions, 70% of the global banana market is controlled by only three corporations—Del Monte, Dole, and Chiquita.

The corporate control over the entire chain of production and the brutality of the corporations during their reign in Latin America became the stuff of popular culture, as seen by Gabriel García Márquez’s retelling of the massacre of striking workers in Cienaga, Colombia, in 1928. But perhaps the most famous example of the power of the multinational fruit corporations comes from the role of United Fruit in convincing the Eisenhower administration that the election of Jacobo Árbenz in Guatemala, and his plans of moderate land reform, would transform the country into a Soviet base.

Perhaps more importantly, land reform in Guatemala would affect the ability of United Fruit to maintain its monopoly on arable land and limit its ability to maximize profit through the exploitation of landless workers. As shareholders in United Fruit, Allen Dulles, the head of the Central Intelligence Agency, and his brother John Foster Dulles, the Secretary of State under Eisenhower, were central to planning the 1954 overthrow of Arbenz, under Operation PBSUCCESS.

Unfortunately, the influence of multinational fruit organizations on governments in the developing world did not end in 1954. After being bought by Cincinnati billionaire Carl Linder in 1984, United Brands (formerly United Fruit) was rebranded as Chiquita Brands International. Despite the name change, the company’s reputation for brutality could not be jettisoned so easily.

In 1998, two investigative reporters from the Cincinnati Enquirer ran a series of stories that documented the long pattern of Chiquita’s labour and environmental abuses in Latin America. The stories, filled with damaging evidence brought to light Chiquita’s role in attacking trade union organizers, undermining local labour laws, and poisoning both workers and the environment with the inappropriate use of chemicals.

The reporters had based their stories on documents and voicemails which had not been obtained with Chiquita’s permission. With the threat of a $10 million lawsuit, the Cincinnati Enquirer retracted the story and published an apology. The matter that the inconvenient facts uncovered in the stories were absolutely true and that Chiquita was engaging in serious human rights and environmental abuses was disregarded. Demonstrating that lessons were not learned, most recently the 2009 coup of Manuel Zelaya in Honduras has been linked to multinational business opposition to his policies which looked to increase the minimum wage by 60%.

With the new WTO rules in place in 1995, the U.S.-based Chiquita viewed the “tariff quota” system in the new common regime as an attack on their operations in Latin America. As a large donor to both the Republican and Democratic parties, there was only one sensible thing for a billionaire like Linder to do. Between 1990 and 1997 Linder donated over $2 million to both parties to purchase as many allies as possible for his assault on the Caribbean banana trade. In order to set things right for Chiquita, Carl Linder arranged for a meeting with Bill Clinton’s trade representative and pleaded his case for trade sanctions against Europe in retaliation to their protected markets.

Chiquita claimed that the protected trade “establishes arbitrary and disruptive sourcing requirements; authorizes confiscatory and discriminatory licences and fees; and, since its signing, has worked a substantial incremental hardship on US commercial interests.” In order to prove this, Chiquita filed a petition under section 301 of the U.S. Trade act of 1974, claiming that the Hawaii Banana Industry Association had been negatively affected, even though Hawaii had never exported any bananas. This manipulation of the trade law was not based on knowledge of the law alone, but was also due to the significant power Linder had in the White House.

Finally, the influence of Carl Linder and his money also overpowered the statements of the Commander-in-Chief of the U.S. Atlantic Command, General John Sheehan who publically expressed his fear of “regional destabilization and increased drug flows if US policy on bananas did not change.” Furthermore in 1996, an International Narcotics Control Strategy Report by the U.S. State Department warned that “the terrain in the Windward Islands was most attractive to South American transhipping of cocaine and that struggling farmers had been turning to marijuana as a cash crop to replace lost earnings.”  By ignoring these statements, it reveals that the motivation for U.S. policy clearly came from corporate board rooms, whereby profit maximization and “strategic geopolitical interests” were simply one and the same.

 


 

Kevin Edmonds is a NACLA blogger focusing on the Caribbean. For more from his blog, "The Other Side of Paradise," visit nacla.org/blog/other-side-paradise. Edmonds is a former NACLA research associate and a current PhD student at the University of Toronto, where he is studying the impact of neoliberalism on the St. Lucian banana trade.

 

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