Bananas Split NATO Members

It may take a leap of imagination to view Caribbean bananas as Slobodan Milosevic's ultimate secret weapon, but they sure are driving a wedge between the NATO countries. The World Trade Organization ruled Tuesday that the U.S. could impose sanctions on almost $200 million worth of European imports in retaliation for European Union protection of bananas grown in former colonies. While Washington called it a victory, the judgment fell far short of the $520 million damages U.S. firms claim to have suffered from those protected fruit.

The proverbial hard part for Washington in this tightly refereed trade war will be to decide which products to drop from the original list of sanctioned items presented to meet a $520 million damages target. "The way they decide which items to include and which to drop is a complete mystery," says TIME senior business writer Bernard Baumohl. "There's no economic reasoning involved at all." But the immediate purpose of the sanctions may be political -- to warn Europe that Washington intends to play hardball in looming battles over hormone-laced beef and genetically altered soy beans, and to show an increasingly protectionist-minded Congress that the WTO can defend U.S. trade interests. And, as in any war, Americans may be asked to make sacrifices -- in this case, Italian cheese, Belgian waffles and Scottish cashmere.