You may have seen this before, but it is worthwhile to remind ourselves
that in our democracy that votes are proportional to dollars. I picked
this account out of Al Krebs's valuable e-mail newsletter, the
Agribusiness Examiner.
SENATOR MAJORITY LEADER LOTT SEEKS
TO GIVE CHIQUITA VETO POWER
OVER ANY BANANA WAR SETTLEMENT
In what critics are calling “outrageous,” “bad trade policy,” and “an
unconstitutional infringement on the
President's foreign-affairs power,” U.S. Senate Majority Leader Trent
Lott is seeking to give Chiquita
Brands International Inc. a veto over any settlement in the contentious
banana trade war.
By inserting language into a Senate appropriations bill that would, in
effect, block the U.S. trade
representative from settling the long-running trans-Atlantic banana war
without first getting approval from
Chiquita the Mississippi Republican is attempting to give a U.S. company
extraordinary foreign-policy
power.
As the Wall Street Journal’s Helene Cooper recently reported some of
the measure's proponents are
annoyed that White House officials have dragged their feet on issuing an
updated list of European
products to hit with punitive tariffs in the banana war, after being
ordered to do so by Congress last
spring.
Lott's Chiquita maneuver, she notes, came a week after Sen. Robert Byrd
(Dem.- West.Virginia) put a
provision in a spending bill handing over to U.S. steel companies duties
collected from their foreign rivals,
imposed to fight dumping practices. The Byrd provision passed in the
House; Senate approval is likely,
aides say. Lott seeks to put the banana provision in a big
end-of-session spending bill; if successful, that
would about ensure enactment.
Lott’s provision would mean the European Union would be negotiating with
Chiquita an end to the
banana trade war. "This is pretty outrageous," Gary Hufbauer, a trade
economist with the Institute for
International Economics told Cooper.. "This basically changes the whole
nature of the system."
House Ways and Means Chairman Bill Archer (Rep. -Texas) and Senate
Finance Committee Chairman
William Roth (Rep.- Delaware) have written letters to their colleagues
complaining about the Lott
maneuver.
"This proposal constitutes, at best, bad trade policy and, at worst, is
an unconstitutional infringement on
the President's foreign-affairs power," Roth wrote. "It is bad trade
policy because it takes control over a
trade dispute out of the hands of the President and puts it in the hands
of one segment of the domestic
industry that is not fully representative of the broader interests of
that industry."
Lott, according to Senate GOP staffers, is merely trying to ensure
Chiquita
doesn't end up with a bad deal. As Cooper notes “Europe is threatening
retaliatory sanctions on U.S.
companies in a separate trade dispute --- over a U.S. foreign-tax
subsidy ruled illegal by the World Trade
Organization in Geneva. Chiquita proponents worry that U.S. officials
might bargain away Chiquita's
interests to placate the EU in the tax case.”
For the past seven years Chiquita Brands International has been opposed
to the EU's existing regime,
which favors EU banana traders. Chiquita, prefers a system that would
base how much a company can
import on the size of its market share before the EU created the current
regime in 1993. At the time,
Chiquita's share was twice the size of its current level. Dole Foods has
now drawn ahead of Chiquita in
market shares.
Although the U.S. doesn't grow bananas, the Clinton Administration has
been fighting for the rights of
Dole and Chiquita to trade with the EU.
Clearly the U.S. bias towards Chiquita stems from the fact that there
are no U.S. jobs here at stake here,
that there is no danger of a further imbalance of trade, and there is no
economic damage about to befall
the U.S. It is simply a case of Clinton & Co. seeking to protect the
financial interests of Chiquita’s Carl
H.Lindner as opposed to the interests of thousands of small banana
farmers in the Eastern Caribbean and
in Jamaica. Chiquita employs most of its 45,000 workers in Honduras and
Guatemala.
As Michael Weiskoff reported in Time Magazine, “You wouldn't know how
grateful Lindner was by
checking records at the Federal Election Commission; he gave the
Democratic National Committee only
$15,000 in the final 15 months of the [1996] campaign. Instead, D.N.C.
officials instructed Lindner to
give directly to state-party coffers, which are subject to far less
public scrutiny than federal-election
accounts. On April 12, 1996, the day after [then U.S. Trade
Representative Mickey] Kantor asked the
WTO to examine Chiquita's grievance, Lindner and his top executives
began funneling more than
$500,000 to about two dozen states from Florida to California, campaign
officials told Time.”
In 1999 after WTO approval, the U.S. closed its market to $191.4 million
in products from Europe, in a
campaign to force the EU to import more bananas distributed by Chiquita
and Dole. That action was
followed as the U.S. did the same to a different list of $116 million in
European products, as part of its
campaign to get the EU to end its ban on hormone-treated beef.
--
Michael Perelman
Economics Department
California State University
[EMAIL PROTECTED]
Chico, CA 95929
530-898-5321
fax 530-898-5901
