BOOK MARK : Will Bananas Put Unity for Europe on the Skids?

The authors of “Europower” set out to examine the forces that launched the European Community, ways in which the EC is likely to change economic life and where it may take Europe. They throw in, for good measure, a few wry nuggets of life at eye-level with 1992. Some excerpts:

Some of the toughest problems raised by the prospect of a frontier-free market from the Elbe to the Atlantic concern the national quotas that certain member states impose on imports. In the industrial arena the big quota issue involves Japanese cars; in agriculture the arguments revolve around the more mundane staples of butter, lamb, bananas and rum. Nonetheless, they are of great moment to their New Zealand, Caribbean and African producers, whose view of “fortress Europe” will be determined by what happens to their commodities.

New Zealand’s share of the EC lamb and butter market has been greatly reduced from what it was in the early 1970s, when much of Britain’s effort in negotiating entry into the Community went into making sure it was not suddenly cut off from its longstanding Antipodean supplier. But despite many complaints from European farmers, New Zealand still retains a butter quota in the British market, as well as a Community-wide quota for lamb. It is just possible that this British quota could survive 1992, de facto, given that the salting of New Zealand butter deliberately caters more to British than to continental palates.

Bananas, however, are much the same everywhere, though their cost of production varies radically. That is precisely the problem facing the Caribbean producers, who now have the jitters over 1992. The current regime governing bananas is perhaps the strangest trade fix of any in the Community.

The market is split three ways. Some 20% of bananas consumed in the EC comes--duty-free--from former British, French and Italian colonies in the Caribbean and Africa, all members of the Community’s Lome Convention with Third World countries. These bananas go to Britain, France and Italy. Around 30% comes from the tropical parts of the Community itself--France’s overseas territories, Spain’s Canary Islands, Portugal’s Madeira and Greece’s Crete--and are mainly eaten within these EC member states. The remaining 50% comes from the huge plantations of Central America, whose so-called “dollar bananas” are eaten by those northern EC states without a tropical, ex-colonial connection.

But there is a further rift in this most fragmented of EC markets. Denmark, Ireland and the Benelux pay a 20% import levy on their dollar bananas, but Germany, the biggest EC consumer of the fruit, does not. Just why the Germans should have insisted during the Treaty of Rome negotiations on special treatment on bananas is not clear; it had no political rationale like Britain’s demands on behalf of New Zealand produce. Perhaps it was the memory of having no bananas during the war that set the fruit on the same pedestal as coffee. At all events, Bonn wants to keep its large duty-free import quota of dollar bananas.

Unsnarling this historical tangle presents one of the more unexpected challenges of project 1992. A totally free market would suit banana-peelers around the Community, and the plantation owners of Central America who would easily be able to undercut growers both inside the Community and in the Caribbean and Africa. The latter, of course, want the continued shelter of their quotas in the British, French and Italian markets, and are appealing to their traditional ties with the Community, and to the Lome Convention, that 1992 should not be an excuse for squeezing them out.

One answer would be to extend the 20% tariff to all dollar bananas, but West Germany won’t agree to that. On the other hand, a post-1992 open market would make it as hard for West Germany to have a separate tariff arrangement as it would be for Britain, France and Italy to have separate quotas. If there is one commodity that puts 1992 on the skids, it will be the banana.

No symbol of a country’s fear of foreign contamination is more graphic than the snarling poster of a rabid dog that greets anyone who lands at a British port. When the British government puts forward a raft of reasons why some checks will continue to be needed at internal EC borders after 1992, arguments about animal, and to a lesser extent plant, disease command the widest public support in Britain--far more than fear of terrorism or drugs.

Of all the checks that take place at borders, those on animals and plants are perhaps the hardest for Brussels to play down. Not because these controls are always effective. Disease is no respecter of thin red lines drawn on the map of Europe.

The difficulty is that the free circulation of animals and plants cannot be achieved by the same means found so successful in other sectors--i.e., agreement by the 12 member nations to harmonize a bare minimum of common standards and then to tolerate each other’s remaining product differences. States can’t mutually recognize each other’s habitual diseases in this way. (“I’ll accept your foot-and-mouth disease, if you’ll relax about my Colorado beetle in potatoes.”)

What the member states might come to accept is the efficacy of each other’s disease-control systems. They are, however, far from that position of mutual trust at the moment. Yet the commission wants to phase out checks on animal and plant imports and to place the onus of health control on the exporting country.

In the case of animals, member states would be allowed, for a transitional period, to carry out checks at the destination of the consignment (i.e. farm, abattoir, processing plant); animals could be held in quarantine, but at their place of destination, not at frontiers. Each consignment of animals or meat would be accompanied by a veterinary certificate issued by the exporting country. Something equivalent--a “plant passport”--would be issued for plants traveling across the community, on the basis of an inspection carried out at the nursery or farm where the plants were grown.

It was the commission’s bad luck that just when it was trying to sell these far-reaching changes to governments, the row over the outbreak of CBP, a cattle disease, in Spain occurred. The response of countries like Britain, Ireland and Denmark, with borders that consist wholly or in part of a natural disease-barrier like water, and which have less than the average EC quotient of animal and plant health problems, was predictable.

“Let us keep our controls where they are most effective--at the frontiers--and do not force us to let potentially diseased animals and plants into the heart of our countries, possibly spreading infection along the way, before we can check them,” they say.

To try to assuage these doubters, the commission is proposing regional, as distinct from national, measures. On the outbreak of a serious animal disease, all movement of animals in and out of the infected area would be halted for 30 days. Brussels officials say they recognize that some animal and plant disease controls may also have to be introduced that cut across national borders. This occurs already in some countries; Northern Ireland, for example, has a better animal health record than mainland Britain because it has certain extra restrictions.

As for the health of plants, it would be abnormal for a landmass the size of the European Community not to have some internal controls, just as the United States does. For instance, there are certain diseases citrus fruit is prone to; but, say EC officials, there would be no point in applying these controls outside citrus-growing areas of Europe. Thus, there might be controls on citrus pests spreading across Spain, Italy and Greece, just as similar controls separate citrus-growing Florida, Texas and California from the rest of the United States.

Copyright 1990 by The Economist Books limited; text copyright 1990 by Nicholas Colchester and David Buchan; reprinted with permission of Times Books, a division of Random House Inc.

BOOK REVIEW: “Europower: The Essential Guide to Europe’s Economic Transformation in 1992” (Times Books) is reviewed on Page 4 of today’s Book Review.