(Page 9 of 30) - Banana Splits: Nested and Competing Regimes in the Transatlantic Banana Trade Dispute authored by Alter, Karen.

In short, the simultaneous membership of states in multiple international

institutions creates political problems resulting from nested/overlapping jurisdictions,
which are hard to resolve because of the non-hierarchical nature of international politics.
For sub-state interest groups and litigants, nesting/overlapping provides multiple
opportunities and avenues to exploit as they promote their agendas. This reality is itself a
problem for decision-makers, yet the absence of hierarchy and the reluctance to
undermine state sovereignty makes resolving this problem challenging.

2. The Transatlantic Banana Dispute

The transatlantic banana dispute is, to date, one of the most complex illustrations

of the legal and political difficulties created by the nesting and overlapping of
international institutions. The EU countries’ multiple international commitments and
obligations, sometimes contradictory, created the conflict and delayed its satisfactory
resolution for over a decade. The contested policy was itself an artifact of nesting: the
challenged policy, adopted in 1992 as part of completing the EU’s single market while
fulfilling a European commitment to the Lomé Convention, ran afoul of WTO rules.
Moreover, the nesting of institutions meant that the contested policy was disputed
simultaneously in a multitude of nested/overlapping institutions: domestic courts,
European courts, and WTO courts. The nested nature of the issue is how we can
understand Europe’s defense of a policy that few loved, and the persistence of a dispute
that should have been fairly easily settled because of the larger interests of actors in
mutual accommodation aimed at facilitating the functioning of the WTO’s multilateral
system. Finally, the banana dispute is important because it was the first transatlantic
dispute to be adjudicated under the newly created WTO. As such, it helped define the
politics of the new WTO system and created a precedent for dealing with a lack of a
hierarchy of norms in the post-Cold War era.

The origins of the banana conflict

The Treaty of Rome, which founded the European Economic Community (EEC)

in 1957, instructed the removal of all internal barriers to trade between its original six
members in order for a true “common market” to exist, as well as the introduction of a
common external tariff applicable to imports from third countries.

In spite of the

Treaty’s ambitious goals, however, national markets long remained fragmented for a
wide variety of goods. The 1986 Single European Act tried to remedy this fragmentation
by calling for the completion by the end of 1992 of a true internal market in which goods,
services, people and capital could move freely.

One such good for which a particularly fragmented market had persisted over the

years was bananas. Europe has never been a big producer of bananas, but it has long been
a big consumer. Individual European countries imported bananas under an assortment of
national practices, owing to preferences based on past imperial relationships and present
vested interests.

By the time of the Single European Act, three distinct regimes existed

The founding members were Belgium, France, Germany, Italy, Luxembourg and the

Netherlands.

See Sutton, 1997, p. 7.