Bad banana medicine from Europe
Tending to bananas in St Vincent
The Windward Island governments which produce bananas-St Vincent and the Grenadines, Grenada, St Lucia and Dominica- have certainly not benifited from the much-vaunted Summit of the Americas here or the Economic Partnership Agreement (EPA) which they were , literally, bullied into signing this time last year. These banana producing territories, which account for a mere one per cent of the European Union’s banana imports, are in danger of going out of business because of a recent agreement between the EU and the Latin American producers, which are in reality American multinationals. There are implications for Patrick Manning’s grandiose plans for political union with these islands.Combined with this country’s deteriorating economic circumstances such lofty dreams may just skid on a banana skin. An editorial from the Vincentian newspaper comments on the situation:
Bananas, it is said, are the world’s favourite fruit. Bananas is also said to be the fourth most important crop in the world, following wheat, rice and maize.
So it is, believe it or not, that St. Vincent and the Grenadines, as miniscule as it might appear, is a player in the worldwide game in which banana is the game’s focus.
Most of the world’s bananas come from the Africa- Pacific- Caribbean (ACP) countries on the one hand, and Latin American (USA-owned) operations on the other.
The supply matrix is such because in the (banana) world market, dominated by consumption in Europe, a battle has been waging between the ACP and Latin American producers; it is , in fact, a battle between former European colonies and recently acquired interests of American multi-national corporations in South and Central America, themselves former appendages of the Spanish ‘new world’ empire.
As it is today, prices paid to producers are one-third lower than what they were seven years ago. Little surprise therefore, that it is said that close to eighty percent of producers in the Windward Islands have gone out of business since 1992.
The salvation (?) for the ACP banana producers has been that window of opportunity (albeit diminishing in size) of some degree of preferential treatment by the European Union (EU) – by the UK in terms of the Caribbean producers. A most-favoured-nation tariff on Latin American bananas entering Europe made for some continuing ‘protection’ for the ACP fruit. Now, what do we hear?
Reports are that the EU and the Latin American banana producers have struck a new deal: the EU will cut its current most-favoured-nation tariff from 176 Euros (US$262) to 148 Euros per tonne, and, over the next seven years, the tariff would be further reduced to 114 Euros (US$ 170) per tonne. In exchange, the Latin American producers will drop all outstanding World Trade Organisation (WTO) arbitrations on the matter.
Needless to say, this new deal puts pressure on ACP bananas. And because of their size, that pressure is amplified when exerted on small producers like the Windward Islands, where it (pressure) can be expected to have a trickle down adverse impact on wages of already hard-to-get workers.
And as if to appease their guilty consciences, the Europeans have offered all ACP banana producing countries, 190 million Euros (US$283.6 million) for restructuring and adjustment. The ACP countries are arguing for 250 million Euros (US$373.2 million) to ensure that there is adequate compensation to each of the banana producing countries. Is this the least they can do in the circumstances?
This recent action by the EU brings into focus the Economic Partnership Agreement (EPA) signed between Europe and the Caribbean. It would appear after finding that it, the Caribbean, had no or very little choice other than to sign on to the EPA, that its partner, Europe, is after all, not as sincere, not as honest, as it purports to be.
But worse for the Caribbean, is the forked tongue of the Latinos. They cry out for a new age of relationship with the Caribbean; some tout a Bolivarian type reform for the region with a common history they say; under one political philosophy, one currency (if they could); but when it comes down to the bread and butter issues affecting the people, bi-lateral, multi-lateral understandings, get thrown down the drain.
This is borne out by CARICOM Secretary General Edwin Carrington who has said openly that the Latinos are ‘pushing the Caribbean out of the EU market even as they are attesting to desire for a closer relationship with the Caribbean’.
So the Caribbean finds itself between the proverbial rock and a hard place: it cannot trust Europe to be an ‘equal’ partner, and neither can it now put any hope in this ‘new’ relationship with our Spanish and Portuguese speaking hemispheric neighbours.
So where does that leave small island states, vulnerable economies like SVG?
Out of sheer necessity, there must be a lobby at the highest trade levels (WTO) for preferential consideration. Our economies are small, microscopic in relation to the world; our human resource base small comparatively speaking,; our economies are susceptible to natural disasters and to the smallest of ripples in the fiscal and financial systems in developed countries – we have to be strong and consistent in our appeals to the likes of the WTO for preferred treatment.
And what of appealing to that new President of the USA, one with a perceived different mindset, is that far-fetched?
Or can Venezuela help us out of this tangled web which we share with new ‘friends’?