Brawl Over Bananas

WHEN A UNITED STATES trade delegation arrived on the Caribbean island of St. Lucia two weeks ago, the visit seemed like a perfect escape from Washington: no more snow, no more scandals, no more tales of shadowy quid pro quos. But the Americans walked into an enemy camp in the middle of an all-out banana war. When they stopped at the rickety, dockside offices of the St. Lucia Banana Growers Association, its managing director, Rupert Gajadhar, lashed out at the Clinton administration's "diabolical" campaign to abolish European preferences that have kept the Caribbean banana trade--and the islands that depend on it--from going bust. "You are conducting the worst kind of economic warfare against a defenseless people," he said. "You take away our bananas and leave us with no alternative but misery, strife, suffering." After a 30-minute tirade, Gajadhar abruptly ended the meeting. The Americans filed out in stunned silence.

So much for a warm Caribbean welcome. When Bill Clinton arrives in Barbados the week after next to meet with Caribbean leaders, his reception will surely be more diplomatic. But throughout the Caribbean, there is a strong undercurrent of resentment against the United States. After years of nourishing democracies in the islands, economic assistance is drying up even as walls of protective tariffs come tumbling down. U.S. economic aid to the Caribbean has fallen by 90 percent, from $226 million in 1985 to $22 million in 1995. Even more damage has been done to the region by the North American Free Trade Agreement (NAFTA). The "great sucking sound" that Ross Perot warned about has been loudest in the Caribbean, which has lost jobs, markets and investment to Mexico. Clinton promised the islands benefits similar to those of NAFTA, but Congress has quashed his proposal twice, and its prospects look dim. Suddenly the region feels neglected. As Vaughn Lewis, St. Lucia's prime minister, told NEWSWEEK: "We have dropped off the geopolitical map."

The banana war is the latest, and most worrisome, sign of a relationship on the skids. The dispute began in 1993, when the European Union (EU) implemented a policy that favored the small banana growers of its former colonies in the Caribbean. It imposed trade barriers on the cheaper bananas grown in Latin America by Dole, Chiquita and Del Monte. Those U.S. companies control some two thirds of the world banana market, compared to just 3 percent for the Caribbean growers. Last year, after heavy lobbying from the Cincinnati-based Chiquita Brands International, which claimed the restrictions cost the company $400 million in lost revenues, Washington took the case to the World Trade Organization (WTO).

The United States had little direct interest in the issue: it does not export bananas, and only a handful of U.S. jobs were at stake. Could there be another reason the White House pursued the case? Between 1993 and 1996 Chiquita and its chairman, Carl Lindner, donated more than $1.1 million to the Democratic Party--enough, evidently, to earn him a night in the White House in early 1995. The contributions were legal, and both sides deny there was any quid pro quo. But Chiquita will soon get at least part of what it wanted: next week the WTO is expected to issue a final report striking down the European preferences, which could have disastrous consequences for the eastern Caribbean.

Washington has a history of protecting American fruit companies. In 1954 the CIA helped overthrow a socialist government in Guatemala, partly to defend United Fruit Co. plantations. Today United Fruit, reincarnated as Chiquita, still exerts influence in Washington. The company lodged its complaint about Europe's banana preferences with the United States Trade Representative (USTR) in September 1994. Lindner, who contributes to the GOP as well (more than $1.4 million since '92), also contacted Bob Dole, who flew in a Lindner-owned plane during his presidential campaign. USTR records reviewed by NEWSWEEK show that Mickey Kantor, Clinton's trade rep at the time, met Lindner on three occasions to discuss the banana issue. The first two were breakfast sessions at the Watergate hotel, hosted by Dole. "Dole was just rabid on the issue," says a former USTR official.

"Lindner wanted the administration to do a lot more than we did," Kantor said last week. Instead of imposing sanctions on the Europeans, as Lindner requested, Washington filed a complaint with the WTO. USTR spokesman Jay Ziegler said his office has a "legal obligation" to protest unfair trade practices "whenever there are U.S. corporate interests at stake." Kantor said the case was based on recommendations by USTR civil servants, not Lindner's contributions to the Democratic Nation- al Committee. Says Chiquita spokesman Joseph Hagin: "The charge that Carl's contributions were linked to policy changes simply does not reflect reality."

The WTO's interim report, which would require the EU to dismantle its preferences, leaked last month. Caribbean growers and their U.S. supporters were outraged. Last week a dozen protesters led by Randall Robinson of TransAfrica, a lobbyist for Third World causes, dumped a ton of bananas in front of the USTR office near the White House. (Bemused passersby took advantage of one of the town's truly free lunches.) "After the fall of communism, we are all dispensable now," says John Mederick, who works for the growers' association on St. Lucia. "For the sake of a single company, the U.S. is threatening to destroy the fabric of a society. Chaos will be the result."

Some Caribbean leaders warn that if the banana business goes bust, the drug trade may increase. Already about 40 percent of the cocaine and heroin sold in the United States comes through the Caribbean, according to U.S. figures, and the eastern steppingstone islands are the fastest-growing conduit for traffickers. "If no alternative is found for bananas, these islands are going to have some big problems with drugs," says St. Lucia police commissioner Vernon Augustine.

Finding viable alternatives to bananas will take time and money. But a short-term disaster may still be averted. Despite a year of heated rhetoric and cold shoulders, U.S. and Caribbean officials say in private that they want to reach a compromise to keep the banana trade afloat. That, in fact, was what the U.S. trade delegation wanted to explore in St. Lucia two weeks ago--if only Gajadhar hadn't gone bananas.