Banana Wars

There's something inherently smirk-inducing about a trade dispute over bananas. You've seen it in the papers in headlines like BANANA SPLIT or GOING BANANAS. But Clark Davis isn't laughing. One day the quality-assurance engineer was contentedly playing in the basement of his Wexford, Pa., home with his N-gauge model railroad--three lines spread over 36 sq. ft. of diorama, styled after turn-of-the-century Europe. The next day, Davis, 66, heard from his supplier of German-made Fleischman engines that not only could the price be doubling but the supplier's hobby shop might even be put out of business. All because the U.S. wants to punish Europe for discriminating against bananas grown by U.S. companies in Latin America.

The dispute, after fermenting in the gut of the world trade bureaucracy for the past seven years, has become at once more serious and more ludicrous. More serious because, unless the Europeans fulfill their obligations under various trade agreements to accept imported bananas, support for trade restrictions will grow among many U.S. commercial interests and their advocates in Congress. A preliminary settlement appeared to have been reached last week allowing the U.S. to impose punitive tariffs on $520 million in European goods, though that figure is subject to review. Whatever the amount, it is not likely to please Europe, and that could spark a trade war that would drive up prices for U.S. consumers and crimp markets for U.S. exports.

The banana battle grows increasingly absurd as it threatens to spread to other food groups, from ham and cheese to wafers and waffles, and to such oddities as candles, cashmere sweaters and model trains. That's because the U.S. targeted for tariffs 17 European exports chosen to "gain the most leverage" over European protectionists. How? Mainly by targeting the British, French and Italians, who have pushed to restrict Latin bananas and to favor those grown in former European colonies, like Martinique and Cameroon.

But why those 17 products? To "minimize impact" on Americans, says the Office of the U.S. Trade Representative. And how does the USTR determine the impact? By throwing the tariff list open to a beagle chorus of special pleading--by U.S. manufacturers eager to get their European competitors barred, by U.S. importers desperate to keep their shipments coming--and to comment by regular folks like Davis, who are caught in the cross fire. There may have once been a time when politics stopped at the water's edge, but today it scarcely taps the brakes.

The first hit list drawn up by the USTR targeted 42 categories of imports, including bath preparations ("other than bath salts") and dolls ("whether or not dressed"). That prompted much yowling from the scores of lobbyists and hobbyists who showed up at a hearing in Washington last month. Importers of feta cheese, a staple of Greek cuisine, implicitly invoked the wrath of the powerful Greek-American lobby and got their product knocked off the list. Pecorino cheese from Italy didn't fare as well; it stayed on.

Model railroaders argued, among other things, that if their trains doubled in price, more kids would turn to lives of drugs and crime. Other train enthusiasts, including Davis, wrote letters: "I fail to see any relationship between model-railroad equipment and bananas." Trains got dropped.