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Trade Disputes

In: Business and Management

Submitted By jbear
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The banana dispute between the U.S. and the EU has become the longest running in the World Trade Organization. The WTO aims to assist the free flow of trade, help discussions about opening of markets, and to settle trade disputes between its members. The U.S. argues that the European Union gives preferential treatment to poor and underdeveloped colonies like American Caribbean and Pacific region. These less developed countries feel trade rules just make rich countries richer, therefore insist on reformed policies that can help advance their economies. The interests of both countries need to be balanced in new trade and rules that are developed and enforced by the WTO. As a WTO task force, standing behind the U.S.’s position is a decision that was made based on the GATT and not on the less developed nations. The international community, including the EU, agreed to the GATT, which does not allow for preferential treatment. Free-trade rules lead to better economic outcomes for everyone because of efficiency and scale. The U.S. wants equal and fair treatment of trading between countries but not all countries, especially countries that are significantly financially dependent on a specific product of export, can compete with developed countries. Although the U.S. is not an exporter of bananas, their position is that the inconsistent tariffs discriminate against U.S. producers that operate in Latin America, primarily Del Monte, Dole and Chiquita (EUbusiness, 2010). The U.S. is arguing for free trade only because it is in their best interest to get the cheapest goods. They are not thinking about the interests of less fortunate and their unstable countries. Many of the countries in Africa, the Caribbean, and the Pacific islands greatly depend on the revenues from their exports to maintain a stable economy. The European Union’s actions have supported the...

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