The World

By Alan Beattie, world trade editor

Church bells are ringing all over Europe, the Caribbean and Latin America. The banana wars originally date from the 1950s and have been fought out in the World Trade Organisation (and its predecessor) since 1993. But now, peace has broken out over the bloodied battlefield, and negotiators are putting down their Blackberries and embracing like brothers and sisters.

I can’t help feeling some form of commemorative service is in order for all of their comrades who laid down large parts of their careers in the conflict. The whole thing is a good example of the dangers of handing out preferential trade schemes, particularly to countries chosen on fairly arbitrary grounds.

In this case, the right to sell bananas into the EU at elevated prices started off as a kind of apology for European colonialism. But it was never much of an anti-poverty programme, since it benefited one set of not particularly poor emerging markets (Jamaica, St Lucia) against another (Ecuador, Costa Rica). And much of the benefit was captured by banana shippers such as Fyffes in any case. It didn’t help that two of the most vocal banana growers (Guadeloupe and Martinique) are actually French departements and hence part of the EU.

Arbitrariness, rent-seeking, colonial guilt and French agricultural lobbying: it’s all a recipe for a stagnant war of attrition. At least the World Trade Organisation was on hand to do some mediation. It took a while, but we got there.

“What did we learn?” says Gardner Chubb, the CIA boss, in Burn After Reading. “I guess we learned not to do it again”. Unfortunately, we’re doing it all over again. Bilateral and other partial trade deals continue to proliferate. Whatever else you can say about the battle of the banana, it is certainly not the trade war to end all trade wars.