What is it with bananas? One of the most important food crops in the world and yet the butt of jokes just as far and wide. They are a symbol of affluence and even of freedom; Germans, in particular, have a thing about them. When the Treaty of Rome was being drawn up in 1957 the then German Chancellor, Mr Adenauer, held it up for three days until bananas were exempted from any single market. When the Berlin Wall was in business, East Germans weren't allowed bananas but when the wall came down, sales soared and they became a symbol of the country's unity. Mr Helmut Kohl went to the Court of Justice to fight for low-cost South American bananas. Like many EU squabbles, it ended in a compromise that satisfied nobody.
That squabble now threatens to tear apart the World Trade Organisation rules. If talks in Geneva this weekend don't succeed, on Monday the United States will declare a trade war with the European Union over a fruit that is produced in neither region. And like most wars, this could spread quickly and widely and is guaranteed to damage the innocent as much as the guilty. The US threatens penal tariffs against 17 categories of goods if the EU's banana import regime is not altered. EU manufacturers of items such as batteries, biscuits, bed linen, candles and cashmere can write off the US market from March 3rd on.
The trouble with bananas is that they are not all alike. European countries such as the United Kingdom, France, Spain and Portugal (former colonial powers) favour the small (expensive) bananas that come from former colonial possessions, especially in the Caribbean. Germany, with no former colonies producing bananas, prefers them larger and cheaper - preferably from South America.
A row within Europe over import quotas can be patched up with compromises but the United States will not be easily mollified. It may grow no bananas but US multinationals control nearly 70 per cent of the world market and they want into Europe in bigger numbers. They also have much clout in Washington. Chiquita Brands made a $500,000 donation to the Democratic Party; within 24 hours the US government lodged its banana complaint with the World Trade Organisation.
There can be no denying that EU import quotas are discriminatory and the United States has a good case. But the US will not wait for the EU experts to make a ruling and the threat of sanctions makes an all-out trade war horribly possible. US bullying will meet its match in EU stubbornness but the sanctions cannot be blocked. WTO rules stipulate that a refusal must be unanimous; the US will be in on the decision and is not going to vote against itself. In Geneva yesterday, the WTO, under Mr Renato Ruggiero, did its best to broker an agreement but this is one dispute which neither side seems anxious to settle. Maybe Mr Ruggiero will emphasise that this sort of showdown can only lead to a trade war without limits - which is about the last thing the fragile world economy needs right now.