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8.59 pm
Mr. Bowen Wells (Hertford and Stortford): I shall briefly remind the House of the history of the banana dispute. In 1947, the islands of the Caribbean were given the exclusive right to export bananas to the United Kingdom. That right was given in compensation for the fact that, during and before the second world war, the European nations, including our own, had been subsidising the production of sugar beet.
Sugar beet is not an efficient convertor of sunlight into sugar. In fact, it has one tenth the efficiency of sugar cane. We wanted to produce sugar beet to make us more
self-sufficient in sugar, rather than simply relying on cane production, principally from the West Indies but also from other Commonwealth nations. Similarly, sugar beet was also introduced in the United States of America. In both Europe and north America, sugar beet production was severely subsidised to enable it to compete in the market against sugar cane imports and, in the United States, against sugar cane production. Sugar beet is still heavily subsidised in Europe, the United States and most developed countries. As a result, sugar cane production was reduced or eliminated from many Caribbean islands.
In 1947, the then Labour Government were faced with trying to find some way in which the Caribbean islands could earn their own living. At the time, we did not have much money to give them--there was no aid budget available. As Michael Foot, luminary of this House, reminded me, the Government gave Britain's banana market to the Caribbean to enable the islands to grow bananas and diversify--we have heard that word already this evening--out of sugar.
That is why bananas became a major export of Caribbean islands that are undoubtedly, geographically and topographically, unsuited to their production. In contradistinction to central America, the land in the islands is mountainous. The soil is not the deep soil that the central American banana producers enjoy. In the Caribbean islands, bananas are produced by small farms in precipitous and inhospitable conditions. None the less, farmers there have managed to work the system and the plantations, many of which are as small as two or three acres, to produce a viable industry.
Importantly, the production of four tiny islands was combined and a shipment of bananas left the Leeward and Windward islands every week. In recent years, other diversified tropical products have been shipped on the same boats to be consumed in this country by West Indians and others who enjoy tropical fruits and vegetables. Unfortunately for the West Indies, without the banana trade the cost of transporting the other products would be prohibitive.
Therefore, in our arguments on the subject when we call for diversification, we must ask what the islands can diversify into. The answer is that, without bananas, they cannot hope to compete on any tropical vegetable or fruit with other major and efficient producers from the tropical countries of the world. The House should understand that the Caribbean islands can diversify their agriculture, but at a price.
Therefore, blocked as they are from coming to this or other countries to work, the islanders have to turn to something else, and that is undoubtedly happening. Perhaps you will be lucky enough, Mr. Deputy Speaker, to go on a Commonwealth Parliamentary Association trip to one of the islands. In St. Vincent in particular, there are empty banana fields because banana production has decreased by 50 per cent. Fields of marijuana are being destroyed by US helicopters with the permission of the Prime Minister. Let there be no doubt in the House that Caribbean farmers have no alternative other than to grow drugs if this ridiculous dispute continues.
I shall quickly remind the House of what the dispute is about. The banana protocol is protected by World Trade Organisation rules under waiver. Section 34 permits
arrangements to be made, for poor developing counties, for preferential trade that is offensive to WTO rules under section 1. The banana protocol is protected in that way and the United States does not dispute that. However, that protection will last only until 2000, when regimes such as the banana protocol of the Lome convention will have to be renegotiated.
The dispute is not over the protocol, but over the proposed banana framework agreement that the European Union now accepts was offensive to WTO rules. It was the hope of the EU that central America would agree, because only an extremely small percentage--less than 3 per cent. and falling--of the whole banana market in the EU enjoys the preferential arrangements given to the Caribbean, and in terms of the world banana trade, the percentage is less than 1 per cent. Incidentally, that trade is dominated--by more than 90 per cent.--by Chiquita, Dole and Del Monte. Those companies are in dispute with those tiny islands so that they can dominate the whole EU market, and they are making a huge trade war out of that dispute.
Barbara Follett (Stevenage):
I welcome the opportunity to speak in the debate, although I deplore the necessity for doing so. The United States is a giant on the world trading stage and it is a pity, to say the least, that the United States should be taking retaliatory action against another giant, the European Union, for giving a few of the poorest Afro-Caribbean countries preferential access to our markets for a single crop--bananas.
I must declare an interest. I was born in the Caribbean and spent most of my early life in Africa. The disputed bananas come from struggling countries in those two regions and, from personal experience, I know how important it is to the people of those regions that what for many of them is their sole export crop should have access to our markets. For the tiny Windward islands of Dominica, St. Lucia and St. Vincent, bananas provide more than 70 per cent. of foreign exchange earnings and 60 per cent. of agricultural employment. As the hon. Member for Hertford and Stortford (Mr. Wells) has so eloquently described, the banana trade is the lifeblood of those islands.
Unlike the hon. Member for Christchurch (Mr. Chope), I do not think that it is simplistic to point out that Caribbean bananas account for only 3 per cent. of the world market and only 10 per cent. of the European market. That point makes it clear that we are arguing about crumbs from the giant's table. If that giant cared about the development of his fellow human beings, he would be glad to allow them those crumbs.
As the hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore) pointed out, the world banana market is dominated by three companies--Chiquita, Dole and Del Monte--whose turnover accounts for more than 64 per cent. of world trade, whereas the total earnings of the Afro-Caribbean countries from bananas accounts for only 4 per cent. of the turnover of those three huge companies. My hon. Friend the Member for Glasgow, Maryhill (Mrs. Fyfe) pointed out that working conditions in those three companies cannot be described as fair. I am aware that the problem is difficult and that there is no prescription for fair trading rules, but we must bear that in mind when we consider the merits of the case.
Chiquita--formerly known as the United Brand Company and, before that, as the United Fruit Company--dominated my teenage years and my 20s. The company came into existence in 1899, since when it has completely dominated banana production in the United States, Europe and Japan. It made an attempt to take over banana production in Jamaica in the 1930s. It is controlled by the American Finance Company and its assets total $25 billion. It has little to fear from tiny family farms of the Windward islands, where wage costs are higher and the terrain and climate less friendly. In the Windward islands, an estimated 27,000 producers scratch out a living on farms of less than five acres each. Such producers can never compete on equal terms with the vast plantations on the flat and friendly terrain of south America--they simply do not have the economies of scale.
When giants fall out, it is always the small people and the small countries that suffer; in this case, those are the African and Caribbean banana producers and the cashmere producers of Scotland. As the EU Trade Commissioner Sir Leon Brittan said, the United States has acted in an "unacceptable and unlawful fashion". It has violated the rules of the WTO's disputes procedure. As hon. Members have pointed out, that establishes a dangerous precedent, which could extend to the 10-year long dispute between the EU and the USA over hormone-treated milk, or to the potentially explosive issue of genetically modified crops and food.
The United States has displayed a singular lack of interest in the needs of the people of the developing world, where, as my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) and the hon. Member for Hertford and Stortford pointed out, the consequences of the Americans' actions could be diversification into the sort of crops that could harm the youth of the United States far more than the sale of Caribbean bananas at a preferential tariff to the EU could harm Chiquita, Dole and Del Monte. I hope that the Americans bear that in mind in the coming round of world trade talks, which hold out the hope of a solution to the problem.
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