------------ EH.NET BOOK REVIEW --------------
Published by EH.NET (October 2008)

James Wiley, _The Banana: Empires, Trade Wars, and Globalization_. 
Lincoln: University of Nebraska Press, 2008. xxxii + 278 pp. $45 
(cloth), ISBN: 978-0-8032-1577-1.

Reviewed for EH.NET by Marcelo Bucheli, Department of Business 
Administration, University of Illinois at Urbana-Champaign.


In 1996, the governments of the United States, Ecuador, Guatemala, 
Honduras, and Mexico filed a complaint to the World Trade Organization 
(WTO) against the banana import policy of the European Union (EU). 
After the creation of the EU, the Europeans were trying to change their 
banana import policy in favor of African and French- and 
English-speaking Caribbean nations to the detriment of Latin American 
producers and U.S. multinationals.  Although bananas are not considered 
a crucial or strategic good in international trade, and neither the U.S. 
or the EU depend on this fruit?s production, this conflict (known as the 
?Banana War?) received great attention from media and from top 
politicians in both the U.S. and the EU.  The ?Banana War? was also the 
first major trade conflict the WTO dealt with and therefore constituted 
a test of how this recently-established organization could handle the 
kind of problems for which it was supposed to have been created.  The 
conflict ended in 2001, when the EU agreed on gradually dismantling the 
preferential country quota system it had created in exchange for a 
tariff-only system.  _The Banana_ by geographer James Wiley puts the 
?Banana War? in historical perspective and analyzes the effects of U.S. 
and European banana trade policies in the context of Caribbean and Latin 
American banana producing countries? political, social, and economic 
characteristics.  Wiley shows how the banana industry evolved in a 
different way in each country, explaining why each country acted 
according to different goals during the ?Banana War.?

Wiley, who teaches at Hofstra University, makes an important 
contribution by putting the ?Banana War? in historical context.  He 
divides the producing areas into two main regions: Spanish-speaking 
Latin American countries and French-, English-, and Dutch-speaking 
Caribbean countries.  The author shows how the historically determined 
political status of the two regions and their geographic characteristics 
defined different paths taken by the banana industry.  During the early 
twentieth century, when the industry was created, the main Latin 
American banana producing countries (Guatemala, Honduras, Colombia, and 
Panama) were part of the informal ?American Empire.?  The U.S. had 
overwhelming political and economic power in the region (particularly in 
Central America), something that facilitated the entry of U.S. banana 
multinational corporations such as the United Fruit Company (now known 
as Chiquita) and to a lesser degree the Standard Fruit and Steamship 
Company (now known as Dole) (chapter 1).  United Fruit controlled most 
aspects of the banana business, creating a vertically integrated 
structured that included plantations, railways, shipping, and marketing 
from the producing areas to the United States.  The company?s activities 
created an industry dominated by large landholdings that used salaried 
or subcontracted workers.  According to Wiley, United Fruit?s vertically 
integrated structure was challenged by rising costs during the Great 
Depression, the entry of Ecuador as the world?s major producer in the 
1950s (with an industry controlled by domestic firms), growing labor 
unionization, the rise of domestic banana growers? organizations in 
Central America and Colombia, and disease that plagued plantations 
(chapter 2).  These events encouraged the U.S. multinationals to reduce 
their producing activities in the producing countries.  By the 1970s, 
the governments of the Latin American producing countries joined to 
actively reduce the power of the multinationals in the banana industry 
(chapter 3).

Wiley shows a different situation in the Caribbean.  First, except for 
Jamaica, the banana industry in the Caribbean islands is relatively new 
(post World War II).  Second, due to their status as British, Dutch, or 
French colonies, the banana industry of these islands was not dominated 
by U.S. corporations.  Third, partly because of government support to 
small farms, the industry was not dominated by large landholdings owned 
by a small number of companies.  And fourth, the industry was created at 
a time when the industry was not dominated by vertically integrated 
firms.  By the 1960s, when the Caribbean industry witnessed its early 
growth, it was not considered technically necessary for a company to own 
plantations in order to distribute bananas in Europe or the U.S.  As a 
result, the Caribbean small growers remained more independent than their 
Latin American counterparts.  Wiley shows how these small growers 
organized themselves in associations to negotiate with the firms that 
bought the fruit to send it to Europe, permitting these growers to have 
a higher income from the banana industry.  Contrary to Latin America, 
government intervention in the industry was constant in the non-Spanish 
speaking banana producing nations, with the extreme case as Suriname, 
where the government owns the banana industry.  According to Wiley, 
these policies permitted a higher standard of living for the banana 
workers in these countries (chapters 4 and 5).

The social and political framework provided by Wiley permits a good 
understanding of the interests around the ?Banana War.?  Wiley shows how 
the open competition advocated by the United States would have harmed 
the relatively good standard of living of the Caribbean workers, who 
would have needed to make enormous sacrifices to compete with the 
under-paid and under-unionized Latin American workers in large and more 
efficient plantations.  Despite the European defense of the quota 
system, Wiley argues that the EU had already been gradually shifting its 
trade policy with former colonies from one focused on aid to a 
market-oriented one in which efficiency was the main goal.  Under these 
circumstances, the Caribbean?s independent banana growers were at a 
disadvantage (chapters 6 and 7).  During the negotiations between the EU 
and the United States, the closer their representatives were to an 
agreement, the more somber the future looked for both the Latin American 
and the Caribbean workers (chapters 8 and 9).  For Wiley, the agreement 
between the U.S. and the EU forced the Caribbean producers to embark on 
a ?race to the bottom? against their Latin American counterparts in 
order to remain competitive.  The much cheaper Latin American workforce 
forced the Caribbean producers to look for other income sources, such as 
tourism.  Wiley argues that the ?diversification? advice given to the 
Caribbean producers by multilateral agencies is not easy in tiny 
islands, in contrast to the larger Latin American countries.  The author 
shows how the number of Caribbean independent producers decreased after 
the U.S.-EU agreement and how their welfare is in peril because the 
diversification programs have not provided enough new jobs (chapters 10 
and 11).

The ?Banana War? generated a large body of scholarship -- the most being 
_Banana Wars: Anatomy of a Trade Dispute_ (Cambridge: CABI, 2003), 
edited by Timothy Josling and Thomas Taylor, and _Banana Wars: The Price 
of Free Trade_ (London: Zed Books, 2004) by Gordon Myers (books 
curiously not mentioned by Wiley).  Wiley makes a contribution to these 
studies by carefully considering the role of the geographic 
characteristics and the social and political history of the countries 
involved in the dispute and by making a comparison between them.  The 
author also makes heavy use of personal interviews with some of the most 
relevant actors in the banana industry and trade negotiations.  Although 
some readers might find the exhaustive description of each step of the 
negotiations at the WTO too detailed, Wiley provides great material for 
further studies on this subject.  Because of its long-term comparative 
nature, _The Banana_ should become obligatory reference to those 
studying the political economy of the banana industry during the 
twentieth century.


Marcelo Bucheli is the author of _Bananas and Business: The United Fruit 
Company in Colombia, 1899-2000_ (New York University Press, 2005) and 
other articles on the banana industry published in _Business History_ 
and the _Business History Review_.  He has essays on this subject in 
_Banana Wars: Power, Production, and History in the Americas_ (Durham: 
Duke University Press, 2003) edited by Steve Striffler and Mark Moberg, 
and in _From Silver to Cocaine: Latin America Commodity Chains and the 
Building of the World Economy, 1500-2000_ (Durham: Duke University 
Press, 2006) edited by Zephyr Frank, Carlos Marichal, and Steven Topik.

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