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Corporate versus National Interest in US Trade Policy: Chiquita and Caribbean Bananas Richard L. Bernal full chapter instant download
Corporate versus National Interest in US Trade Policy: Chiquita and Caribbean Bananas Richard L. Bernal full chapter instant download
Corporate versus National Interest in US Trade Policy: Chiquita and Caribbean Bananas Richard L. Bernal full chapter instant download
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Richard L. Bernal
Corporate versus
National Interest in
US Trade Policy
Chiquita and
Caribbean Bananas
Corporate versus National Interest
in US Trade Policy
Richard L. Bernal
Corporate versus
National Interest
in US Trade Policy
Chiquita and Caribbean Bananas
Richard L. Bernal
Office of Global Affairs
University of the West Indies
Kingston, Jamaica
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Acknowledgements
A loving family is the ultimate good fortune in life. I have certainly been
so blessed throughout my life. The example and unconditional support of
my parents is evident in everything I have done. There has been no greater
inspiration than the pride in my sons, Brian and Darren and the unlimited
joy of my grandchildren, Nile and Elle make me glad for each and every
day of life. There is so much to thank my wife Margaret for that it would
fill a very long book.
My teachers have the right to expect more and better. I unreservedly
express my appreciation to them. My professors at the University of the
West Indies, Trevor Munroe, Orlando Patterson, Clive Thomas, Douglas
Hall, Adlith Brown, Rex Nettleford, and George Beckford. My exposure
to David Gordon, Gita Sen, and Anwar Shaikh was enjoyable and enlight-
ening. I have benefitted immeasurably from the invaluable advice and con-
sistent support of Sir George Alleyne, Prof. Franklin Knight, Prof. Edward
Greene, Richard Fletcher, Douglas Fletcher, Dudley Clarke, Dr. W. Astor
Kirk, Prof. Vishnu Persaud, and Prof. Donald J. Harris.
Ambassador Donald Mills was such an inspirational example who was
always willing to share his experience. My mentor Sir Alister McIntyre
always provided sage advice, indeed, I was wiser after every conversation.
A very special appreciation must go to Professor Norman Girvan, teacher,
mentor, and friend who contributed immeasurably to my intellectual
growth and from whom I learnt much about being a professional econo-
mist and policy advisor and who provided opportunities for my develop-
ment. I learnt a great deal from working with Michael Manley on the
v
vi ACKNOWLEDGEMENTS
Many people helped in the fight to dissuade the United States govern-
ment from dismantling the European Union banana regime. Praiseworthy
were the ambassadors of the Caribbean countries including those that rep-
resented countries that did not export bananas. They were gallant and
tireless in their efforts. Vigorous and sustained support was provided by
Congresswoman Maxine Waters, Randall Robinson of TransAfrica and
advice on lobbying by Hazel Ross-Robinson and George Dalley. Among
the stalwart supporters were the hard-working staff of the Embassy of
Jamaica in Washington DC and Jamaica’s Permanent Mission to the
Organization of American States during the time when I was Ambassador
to the United States and Permanent Representative to the OAS.
The book is based on notes, statements, and analyses written by me
during the events related and reworked in the years since then. I retained
extensive and detailed material in my personal files and I was able to draw
on letters and correspondence meticulously preserved and filed by my
secretary at the time, Mrs. Diane Smith-Brown. I kept the material
because while the EU banana was ruled incompatible with the rules of
the World Trade Organization in 1997, it was not replaced until 2010.
During this time, I retained a feeling that an injustice had been perpetu-
ated which was not in the interest of the USA and it was harmful to the
small Caribbean islands that exported bananas. The passage of time had
the advantage of allowing me to observe the implications in the Caribbean
of the dismantling of the EU banana regime. I decided in 2019 to revisit
the issue initially for my own clarification and in the course of writing, I
felt that the story was worth sharing with the public in the form of a
book. I approached Palgrave Macmillan who had published one of my
earlier books and they agreed to publish. This provided the impetus to
finish the manuscript.
The process was long and arduous but fortunately, I imbibed a Calvinist
work ethic and persistence from my father, Franklin and calmness from my
mother, Kathleen. They facilitated my unlimited reading of anything and
everything and Franklin set the example of writing books and the fondness
for writing. The opportunity to complete the text was afforded me by the
lock-down period following the global pandemic of the COVID-19 which
saved much commuting time.
I have dedicated previous books to my parents, wife, children, and
grandchildren, all of whom have enriched my life and made this book
viii Acknowledgements
possible. In case this is my last book I do not want to miss the opportunity
to dedicate this book solely to my late brother, Robert Franklin Bernal. I
express my appreciation to the Rt. Hon. Professor Owen Arthur, former
Prime Minister of Barbados for agreeing to write the foreword for this
book. Unfortunately he died before completing the foreword.
Contents
Bibliography237
Index269
ix
Abbreviations
xi
xii Abbreviations
Table 3.1 Land area, population, gross domestic product (GDP), GDP
per capita of Caribbean banana exporting countries, and the
United States of America (1999) 43
Table 6.1 Lindner’s campaign contributions (1991–99) 128
Table 8.1 Status of US National interests during and after the
EU banana regime 226
xv
CHAPTER 1
Introduction
From antiquity, trade has been dominated by private individuals or groups
of individuals in the form of companies. When governments decided to
regulate trade and to implement the codification of the rules as national
trade policies, the private sector exerted influence. In the modern world,
the private sector and corporations, in particular, are the drivers of trade
policies. This is the first fact to note about trade policy. The second fact is
that throughout history, the state has actively and consistently supported
private corporations including defending their property abroad, forcing
foreign governments to open access to their markets, subsidizing their
costs, and compelling governments to give concessions, inter alia. In
mobilizing state support for their activities, corporations have always been
able to count on the common belief that in a capitalist economy what is
good for corporations is good for the government and the country, that is,
in the national interest. This is not necessarily true because what a corpo-
ration wants or is doing is often in contradiction to the national interest.
In a modern democracy with mechanisms for transparency, an active press,
and competing political parties, such a contradiction should be uncovered
and be part of the debate over public policy. Such debate is a reflection of
society consisting of a variety of groups with different interests, and in a
democracy, what is determined to be in the national interest is the out-
come of the resolution of these differing interests. The idea of a policy
based on a consensus resulting from a reconciliation of different
perspectives of interest groups is not always realized. When this does not
happen, it is the case that a particular interest group and sometimes a
single corporation or institution has prevailed in the competition to influ-
ence public policy. The public and media find trade issues complex and the
beneficiary corporations spend considerable sums to influence public
opinion, politicians, and policymaking officials.
Objectives
The objectives of this book are:
First, to document and explain how Chiquita, a large US-owned mul-
tinational corporation, succeeded in having the Clinton administration
pursue a trade policy of forcing the European Union to dismantle its pref-
erential banana import regime1 for exports from small Caribbean coun-
tries. Chiquita was able to induce the US government to engage in a trade
war with the European Union (EU) including the imposition of increased
tariffs over a product not produced in the United States and that was
equivalent in value to only about 10 percent of US-EU bilateral trade.2 It
is, therefore, a case study of how corporate interest, in this case, an
American multinational corporation, influenced US trade policy and,
hence, is illustrative and instructive on the process of trade policy formula-
tion in the United States.
Second, to explain that the United States’ success in having the EU
banana regime dismantled was not in the national interest because of the
harmful repercussions for the Caribbean banana exporting countries
which experienced a very significant decline in production and exports.
The export of bananas was critically important to the economic viability of
the Eastern Caribbean islands. The decline put in jeopardy the social and
economic basis for their prosperity, peace, and democracy. Subsequent to
and accompanying the decline in the banana industry, these tiny mono-
sectoral economies became more vulnerable to drug trafficking, social
instability, crime, and the temptation to indulge in policies such as citizen
investment schemes, which were in the national security interest of the
United States. The national interest of the United States is to have
Caribbean neighbors that are peaceful, democratic, and prosperous. The
experience indicates that Chiquita’s success in having the United States
dismantle the EU regime was not in the United States’ national interest
indeed and was detrimental to US national security interests in the
Caribbean. Chiquita’s success in having the United States support its
1 OBJECTIVE AND ORGANIZATION 3
Methodology
The research methodology examines international trade policy as the out-
come of the interaction of competing interests by an application of a
nuanced modification of the well-known interest group approach to poli-
tics.4 International trade policy of the United States, like its foreign policy,
is the result of complex, constantly shifting interactions among competing
interests5 which are not necessarily groups, but are actors which can take
the form of political parties, corporations, business associations, individu-
als, government departments, think tanks, non-government organizations
and even foreign governments.6 Economic interests dominate the motiva-
tions of the interest groups that seek to influence US trade policy. How
these goals and efforts translate into trade policy is affected by ideas about
trade7 and approach to overall foreign policy. A disproportionate influence
is exerted among the competing interest groups by what Dreiling and
Darves explain as the “class agency of business leaders”8 representing
corporations.
Organization
Chapter 2 outlines the process of the formulation and implementation of
US international trade policy and explains the role of corporations in this
process. Ideally, trade policy is a blend and synthesis of competing societal
interests working through the governmental system of Congress, the
White House, and federal bureaucracy. The end result, as far as possible, is
supposed to be a trade policy that reflects a national consensus, the goals
which are regarded as in the national good of the United States. This is
often not the outcome in reality. On the contrary, the review of trade
policy formation reveals that corporations have always exerted a strong
influence on US public policy9 inclusive of trade policy. This arises from
the financial resources that they are able and willing to deploy in support
of the objectives. An additional advantage has been the technical complex-
ity of some trade issues, the nature of which often make it difficult for civil
society to navigate the arcane and specialized jargon to clearly articulate
4 R. L. BERNAL
market share and profits for the corporation, but which would do enor-
mous damage to both the United States, the European Union, and pos-
sibly irreparably damage the newly established World Trade Organization
(WTO) as well as the smallest banana exporting countries in the world. It
is an amazing level of selfishness that Chiquita could so conveniently con-
flate its corporate interest with that of the national interest of the United
States. It is also an indication of the extent of Chiquita’s influence on US
trade policy, the disregard for the wider American national interests, and
the lack of empathy for the possible harmful implications for the very small
banana exporting islands. Interestingly, the lobbying and public relations
campaign which Chiquita employed to achieve their ends did not have to
involve any illegal activities because lobbying is an accepted part of the
formulation of US foreign trade policy. This is just the way the process
works in the United States.
Chiquita used its financial resources to mobilize political influence in
several ways, but most notably in financial contributions to get the Clinton
administration to pursue a policy in its interest. Such was the power of
Chiquita that it defeated the strenuous opposition of Caribbean govern-
ments and the steadfast resistance of the European Union led by the
United Kingdom and France. The victory of Chiquita was highly detri-
mental to US national security interests in the Caribbean. The collapse of
the banana industry caused serious economic dislocation and thereby
made these small island developing states more vulnerable to narcotics
trafficking and the associated transnational crime.
Chapter 6 examines the impact of the dismantling of the EU banana
regime on the Caribbean. Barbara Welch writing in the late 1990s describes
the dilemma of the Eastern Caribbean banana producing islands as: “They
share a long and chequered colonial past, a precarious present and an
uncertain future.”18 A July 2019 paper from the International Monetary
Fund (IMF) states that the unemployment rates in the small developing
economies of the Eastern Caribbean have persistently been among the
highest in the world. The analysis concludes that “while available statistics
confirm that agricultural employment in many (Eastern Caribbean) coun-
tries continuously declined after the collapse of the banana and sugar
industries, unemployment rates remained stable amidst contracting agri-
cultural employment, as fast growing employment in tourism and public
sector employment considerably offset the impact of the banana and sugar
industries collapse.”19 The situation could be seen very differently, that is,
if there had not been the collapse of employment in the banana industry,
1 OBJECTIVE AND ORGANIZATION 7