Hands off our bananas
On networking hardware, Cuban sanctions and...
This story was filed originally in 1997 Following US complaints, The World Trade Organisation (WTO) has headed off a sneaky attempt by the European Union to reclassify networking hardware components as telecoms goods. This would have seen tariffs on non-EU imports on LAN hardware rise from 3 per cent to 7.5 per cent. However, the WTO has rejected the US’s attempt to stop the EU from reclassifying multimedia PCs as consumer electronics equipment. This would see tariff duties rise from 3.5 per cent to 14 per cent. The EU’s reasoning is bizarre. Equally bizarre, it has no intention of actually collecting the duties - as there is no indigenous European CD-ROM drive industry to protect. This case has more to do with the EU standing up to the playground bully, than with commercial logic. Successful action from the US and Latin American countries in getting the WTO to declare EU banana quotas illegal is far more controversial. The EU currently guarantees a percentage of the EU banana market to Caribbean growers. Most EU countries - especially France and the UK, which used to run colonies in the region - are in favour of the status quo. (Germany, which has the world’s highest per capita consumption of bananas is a notable exception). Claire Short, The British Government’s magnificent Minister for Overseas Aid, urges European consumers to boycott Latin American bananas. A letter from Mr Michael A. Samuels, of Washington DC, to The Financial Times , said such action would violate the WTO and undermine the integrity of that important body. As regrettable acts such as these would perpetrate massive unfairness and hostility towards hundreds of thousands of farmers and workers in Latin America, who like their Caribbean neighbours depend on EU banana sales to earn a living. "The unfortunate irony is that, as numerous economists have made clear, proposals of this kind are nothing more than a thinly effort to ensure that certain EU middlemen continue to be enriched." Let’s get this straight. EU middlemen are teddy bears compared with American banana middlemen. Take United Fruit, the effective owner of Guatemala for 50 years. In 1954, the company financed a CIA-engineered coup, when it feared it would lose control of its very own banana republic. The US is protecting companies such as United Fruit when it lobbies the WTO to change EU banana policy. Latin peasants can rot in the fields. The US likes the WTO. According to the estimable Joe Rogaly, a senior columnist on The Financial Times, "of the 101 cases filed in the first 2.5 years of the panel’s existence, 35 originated in the US - the principle base of global businesses, the world’s largest exporter, and the home of intergalactice companies, like Boeing, Intel, Microsoft ". "Funny about Intel being on that list. Not many years ago, Japanese manufacturers of semiconductors were regarded as a threat, likely to dominated world market, the US set numerical targets for exports of American chips to Japan. Today, the WTO is designed to free the world from such constraints." The US preaches free trade but it is all too willing to cite anti-dumping rules to protect its companies. US memory manufacturer Micron is a prime beneficiary of this readiness to levy fines and tariffs in the name of "fairness". It is also equally willing to ignore WTO policy - when it suits. US Cuban sanctions are clearly illegal, under international law. But Jesse Helms, the odious senator for North Carolina, and head of the US Senate’s foreign policy committee, is clearly far more important than principles of international law. With fellow sponsor, senator Dan Burton, Helms sponsored a bill that bars from entry in to they US any foreigner who uses property confiscated by Cuba that is claimed by a US national. It also allows companies doing business in Cuba to be sued in US courts. The European Union has expressed irritation with this US attempt to extend sovereignty beyond its shores. But so far it has funked outright confrontation. EU complaints to the WTO on Helms-Burton have faded into insignificance. Which brings us back to LAN tariffs. The US should have its way on networking hardware import duties. The tariff threat over multimedia hardware should also be lifted. But keep your hands off our bananas. ®
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