Market Scene : Trade Rules on Bananas Threaten Way of Life : For decades, Windward Islands enjoyed a monopoly in some markets. Now they are ripe for competition from other producers.

If you live on St. Lucia, there is one thing you put above all else. It’s not the blue water harbors, nor the sugar sand beaches, nor the near-perfect weather that makes this tiny Caribbean island an Eden to tourists. It is the banana.

Bananas are everywhere. They grow on mountainside plantations, in small valley farms, the back yards of tiny urban homes and along the roadsides. They grow seven days a week, 52 weeks a year.

The people eat them raw, cook them, make chips from them and even drink them; banana wine is no doubt an acquired taste.

But mostly, St. Lucians sell them. By the hundreds of millions. In fact, the banana is the lifeblood of St. Lucia and the other volcanic sand spits that make up the Caribbean’s Windward Islands.

Because while American, Canadian and European tourists come to St. Lucia (pronounced Loosha) to escape sleet, snow and gray winters, bringing millions of dollars with them, their money pales in comparison to what the 150,000 residents here call green gold.

Banana exports account for more than 70% of the nation’s income and 80% of its jobs; they support a yearly per capita income of nearly $2,300--one of the highest in the region. The reliability and constancy of the perpetual banana crop have given St. Lucia a political, economic and social stability nearly unmatched in the region.

But the crescent-shaped fruit has also created a dependency--one that is suddenly very fragile and increasingly at risk.

The threat comes not from blight, nor drought, nor falling demand. In fact, it is an increasing appetite for the banana throughout the cold climates that is threatening St. Lucia, along with the concept of worldwide free trade.

For decades, the five principal Windward Islands have had a special trade relation with the European powers that colonized them--Martinique with France, St. Lucia, Grenada, St. Vincent and Dominica with Great Britain.

In exchange for selling nearly its entire banana crop to the British, St. Lucia was provided with a steady and subsidized market, free from competition. For example, France and particularly Britain insist that the European Economic Community keep a tight yearly quota on non-Caribbean bananas with a heavy duty on any imports above that figure.

Now that cozy relationship is under attack from the so-called dollar bananas of Central and South America, which are produced more cheaply and, some say, are of better quality.

Germany, the Netherlands and Luxembourg have challenged the special relationship on grounds that it violates the free-trade provisions of the EC and has driven up banana prices in their countries.

The United States also has joined in the attack on behalf of Central American banana producers, most of which are owned or heavily invested in by American companies.

There is also a conviction, according to a European diplomat here, that the lack of competition has produced an inferior St. Lucian banana. “It’s sweet enough, but half the time they arrive overripe, or bruised, and they are too small. Maybe now they’ll do better.”

According to the Windward Islands Banana Growers’ Assn., any change in the current arrangement “would be a disaster. These economies could not survive.”

A tour of St. Lucia reinforces that judgment. Everything is tied to the banana. The roads are designed to move bananas; the ports are configured to load bananas; even school schedules are arranged to provide time to pick bananas.

There is a sense of resignation about the threat to St. Lucia’s lifeblood in conversations with government officials. “We are too small to make any political difference,” said a Foreign Ministry official who asked not to be named. “Our future lies in Brussels and the GATT talks.”

He was referring to the German attempt to get the EC to overturn the St. Lucia preferential agreement and the U.S. argument that the arrangement violates the General Agreement on Tariffs and Trade.

In the meantime, there is a half-hearted policy of diversifying the economy. Tourism is the second-largest foreign currency earner, with about 325,000 visitors bringing in about $180 million a year.

But the island, which is only 28 miles long and 14 miles across at its widest point, doesn’t have the infrastructure to take care of many more tourists. In addition, tourist spending tends to center in the self-contained resorts that ring the coasts and doesn’t spread into the general economy like the banana business.

The government is also encouraging textile manufacturing and the production of toys and diving gear. But while about 20% of the work force is now in manufacturing, most economists here say the regional recession has limited investment and that it is unlikely the sector could expand enough to offset the anticipated loss of banana income.

The Banana Growers Assn., while hoping to maintain the preferential trade with Great Britain, is making plans to try to compete with the Latin crop.

There is a serious effort to increase the quality of St. Lucian fruit, particularly to reduce the amount of rot and mechanical damage.

The idea of “competition is very new here,” another diplomat said. “If the agreement is overturned, St. Lucia might be able to keep its share simply because they can produce a better banana.

“After all,” he said, “you know that your Costa Rican banana is small and tasteless compared to these. Now if they can only learn how to get them to us ripe but not rotten. Then they’ll be all right.”