7 April 1999: The WTO rules in favour of the US in the Banana Wars

The World Trade Organisation sides with the US over the EU's preferential treatment of its former colonies in the banana trade, on this day in 1999.

Despite being the quintessential prop of slapstick comedy, bananas are serious business. In 2014, 5,691,782 tonnes of them were eaten in the European Union the largest market in the world for the consumption of bananas. It's not too surprising, then, that American-backed producers wanted access to such a lucrative market.

For much of the 20th century, huge American corporations, in particular the United Fruit Company, had supported corrupt “banana republics” in Latin America. So it's safe to say they were used to getting their way. However, the EU operated a system whereby preferential treatment was given to former colonies in Africa, the Caribbean and the Pacific, many of which depended on the banana trade.

The United States argued that this broke international rules, and it took its case to the World Trade Organisation (WTO). The EU responded by adopting a “first come, first served” system as container ships arrived in port, but Washington held out for more.

A list was drawn up of European goods which would be subject to 100% import tariffs, which included French handbags, German coffee-makers and cheese from Italy. But what hurt the British, or rather the people of Hawick, the most were the sanctions on Scottish cashmere sweaters. Around a thousand jobs depended on the cashmere industry in the small Scottish town in the Borders, which had a population of less than 15,000.

On 7 April 1999, the WTO ruled in favour of the US, and awarded $191m in damages –  somewhat less than the $520m Washington had sought. However, the negotiations went on for years.

In 2001, a deal was reached whereby the sanctions against European imports were suspended. Eight years after that, the Banana Wars – the world's longest-running trade dispute – were declared over.

Europe's former colonies would continue to enjoy tariff-free exports to the EU, while tariffs would be cut on Latin American imports from €176 a tonne to €114 a tonne by 2017. Brussels also pledged €200m to help former colonies modernise and diversify their economies.

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