WASHINGTON (FNS) -- Food retailers dodged a bullet in the Banana War.
Four months after the United States threatened to impose 100% import duties on European Pecorino cheese, canned pork products, crackers and biscuits in a dispute with the European Union, the Clinton administration dropped most consumer products from a "hit list."
Cashmere sweaters and candles were other major consumer products dropped from the list, but electric coffee makers, various bath preparations, cotton bed linens and vinyl handbags remained.
The Office of the U.S. Trade Representative announced it would impose these duties on $191.4 million worth of products shipped here by EU nations. This action was in retaliation for that trade bloc's refusal to revamp policies that give tariff advantages to bananas imported from selected former colonies in Central America and the Caribbean. The United States maintains this has caused economic harm to U.S. firms -- mainly Chiquita and Dole -- that export bananas from other Latin-American nations.
The World Trade Organization separately authorized these sanctions, but at a level far below the $520 million worth of EU products the United States had been threatening with penalty duties since December. Fifteen products were targeted then. U.S. trade officials said the 100% duties on the remaining goods would be assessed retroactive to March 3.
Products subject to these sanctions face a de facto sales ban here, trade analysts say, since retailers would have to double prices to offset the extra duty, effectively pricing these goods out of the market.
Even if the various European food products had remained on the list, the loss of sales likely would not have done in supermarket operators. But it could have hurt some. "Most of the products are sold in specialty stores, ethnic markets" and in some supermarkets' gourmet food sections and so "their loss wouldn't have had an impact on most retailers," a Food Marketing Institute spokeswoman said last week.
Of far greater concern, she said, "is the philosophical issue: supermarkets should not be made the battlefield for trade wars. Sanctions hurt the people who are not involved in the dispute by taking away these products at the supermarket." Obviously, retailers also lose sales, too, in such cases.
Although the banana dispute now is unlikely to affect food retailers, they are concerned about yet another trade spat with Europe that could create problems for food retailers and their customers. The United States in late March said it has asked the WTO to approve the imposition of 100% duties on $900 million worth of European products, virtually all of them foods. The U.S. claims the EU is illegally banning the importation of hormone-treated beef in violation of WTO rules.
The products targeted for sanctions in this dispute include fresh, frozen, chilled, canned or preserved beef, pork, poultry, fowl, sausages of all meats and pates. They include a large variety of fresh, chilled, juiced, sauced or preserved fruits and vegetables, Roquefort cheese, soups, broths, mustards and paprika.
Timothy M. Hammonds, the FMI's president, in March wrote in a letter to Charlene Barshefsky, the U.S. Trade Representative, that such sanctions could well lead to a tit-for-tat trade war and cause a consumer backlash against retailers.
"For the most part, the products elected for sanctions because of these conflicts have little or nothing to do with the products in the actual dispute," Hammonds wrote. "This lack of direct connection with the actual problem means that American consumers will not understand why popular products with no effective substitutes are no longer available to them for no apparent reason."
