Case Overview The Banana Wars refers to when The European Union (EU) was investigated for utilizing unfair trade practices. On two separate occasions, once in 1993 and another in 1994, panels of the General Agreement on Tariffs and Trade (GATT) found EU banana rules to be unfair and tried to convince them to reform the rules to no avail (Czinkota, Ronkainen, & Moffett, 2011). Although this situation affected many countries, it would have a great impact on the Latin American banana workers and the Caribbean banana workers. After many complaints and attempts to resolve the situation, in 2009 all parties involved agreed to a new tariff agreement. For the Caribbean workers it was a great disappointment with regards to their economy and their families.
The European Union called for a 2.2 million ton quota with a 20 percent tariff for all imports of bananas from Latin America which would be $126 per ton. This allowed former colonies preferential access to the European market. On the other hand, Caribbean countries need support due to banana exports being the main part of their economies. The benefit to siding with the Caribbean countries is helping the people in the country that make their living growing and selling bananas. Although the production has decreased immensely, the quality of the bananas have increased and yield a higher price. The European Union’s final decision has caused the Caribbean economy to decline and has affected the lives of many people. I feel the Caribbean should be able to continue exporting bananas at a fair price to help their economy and build the developing country up, but the exports are on a downward trend. The Fair Trade Act should be enforced in this instance to help sustain their economy (Czinkota, Ronkainen, & Moffett, 2011).
The Caribbean banana growers have a hard road ahead. Windward Island countries in the Caribbean have the highest dependence on banana exports at around 60%. Tourism would be an alternative market for farmers to consider although it is estimated that for every acre of land used for tourism, is three times more profitable when used for producing bananas. The country could grow other crops, but due to poor soil levels this may be too difficult. It will be very difficult to replace all of the lost jobs of the banana farmers because no matter what they do to try to supplement their income, there will only be so many jobs available. Also, some of the farmers and their families have no education or skill other than farming bananas. Alternatives for the EU would be that they are getting lower prices for their bananas (Czinkota, Ronkainen, & Moffett, 2011).
Strategic moves that may be made by an international marketing manager of Latin America banana exports may make are pricing issues, where the bananas are to be distributed, as