The European Union enacted import restrictions on banana’s in 1993, and just recently, is attempting to revise the old regime in order to comply with the World Trade Organization. The EU is preparing to introduce a new import system dubbed “first-come first-served” which they believe will be a WTO compatible system. Chiquita filed a lawsuit in January, 2001 against the European Union seeking reparations in the amount of $525 million for their losses that resulted from the old biased import system (Palmer).

Chiquita is just one of many companies that were affected by this biased import regime, but some other companies still managed to work aro

The old EU import regime was not only an issue for the companies involved, but for the United States as a whole, since it affected banana’s and other agricultural products sold in the US. The regime initially was enacted in 1993, and was later ruled in 1997 to not be in compliance with the World Trade Organization (PR Newswire). The regime was designed in part to protect less efficient banana growers in former European colonies. Chiquita’s management has complained for years that the policies of the EU have cost the company millions by favoring banana’s from Caribbean producers in former European colonies.

They also have promised that this is just their first move toward an open and competitive banana market. They passed a law committing to open its banana market no later than January of 2006. The U.S. government as well as Chiquita is opposed to this new system. Chiquita wants managed trade, a closed market with a guaranteed market share. Under this proposal, licenses would be awarded only to certain importers based on their historical market shares of five to ten years ago. This proposal is flawed, though since there is no fair or legal basis to achieve it. It also sets a bad precedent for other trade negotiations because it continues a managed market instead of an open, competitive system.

The EU’s rules were judged to discriminate in favor of growers in EU territories and the Caribbean at the expense of Latin American producers and U.S. marketing firms (Croft). Britain and some other member nations of the EU still want continued protection for banana imports from African, Caribbean, and Pacific states, many of which are former colonies. Chiquita was the hardest hit from this import regime. They dropped from a forty percent market share to less than a twenty percent market share. Normally, this would not have totally destroyed a company, but in the case of Chiquita, it nearly did. Chiquita, more than any of its rivals, invested heavily in the 1980’s to exploit the European market, where a long established system of trade protection allowed bananas to be sold at more than twice the price than in the United States. More than half of the company’s revenues came from European sales.

However, Murdock’s claim against Chiquita is well founded. It seems as though Chiquita is trying to unfairly regain its old market share. The company’s goal should be movement toward fair trade, but they oppose such propositions. They propose a closed

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