Financial Times
December 29, 2000
By Canute James

Kingston -- Caribbean banana exporting countries will seek the assistance of the outgoing Clinton administration to protect their preferential market in Europe, following an European Union decision to open the market, officials said on Thursday.

The EU move, announced last week, is aimed at ending a protracted trade row with the US over the banana market.

"I hope this matter can be resolved quickly, before the Clinton administration leaves office," said Anthony Hylton, Jamaica's foreign trade minister.

A senior official of the Caribbean Community (Caricom) said: "Small Caribbean producers cannot compete in an open market against the bigger producers in Latin America. The region will lose."

The World Trade Organisation has supported a claim by the US and several Latin American banana producers that the preferences given to the Caribbean exporters, and other former European colonies, violates trade rules.

In seeking a resolution of the dispute, the EU has proposed a "first come, firstserved system". Exporters who enter the market first will be given priority.

"We have consistently said that the use of this system will be a significant disadvantage to Caribbean exporters," said Mr Hylton. "Producers with larger shipping fleets and greater volumes of production will be at a significant advantage with the EU's proposal."

Caribbean trade officials contend they cannot compete openly against cheaper fruit from Latin America. The cost of producing bananas in the islands is about three times that of Latin America producers.

The Caribbean industry claims that this is the result of the natural handicaps of steep terrain, the limited size of the islands, the small size of farms, poor soils, climatic hazards such as hurricanes, and higher wages paid to farm workers.

Ships carrying Caribbean bananas have to move from one small country to the next before they have quantities that are feasible for a trans-Atlantic voyage to Europe, said the Caricom official.

With the proposed "first come, first served" system, by the time these ships get to Europe, larger producers would have already landed their cargoes and would have been granted licences, he said.

"I have reason to believe that this may not be the last word on the matter," said Mr Hylton.

The US Trade Representative and many Latin American banana exporters are also opposed to the EU's proposal, he said.