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Banana Splits: Policy Process, Particularistic Interests, Political Capture, and Money in Transatlantic Trade Politics

Published online by Cambridge University Press:  20 January 2017

Olivier Cadot  and
Douglas Webber
Olivier Cadot*
Affiliation:
HEC Lausanne, CERDI and CEPR, London
Douglas Webber*
Affiliation:
INSEAD
*
HEC Lausanne, BFSH 1, CH1015 Lausanne, Switzerland. Email: [email protected].
INSEAD, Asian Campus, 1 Ayer Rajah Avenue, Singapore 138676. Email: [email protected].
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Abstract

The most intractable and protracted transatlantic trade conflict of the last decade was over bananas, which grow neither on the European nor on the North American continent. Our explanation of the conflict emphasizes the determining role of the domestic politics of the EU and the United States. It was driven not only by the extreme divergence of preferences of Brussels' and Washington's domestic constituencies, rooted in the competitive position of competing banana industries, but also, and critically, by the institutional configuration of (agricultural) trade policymaking on either side of the Atlantic. The EU agricultural trade policy process is characterized by a division of labor that favors agricultural over wider trading interests, sectoral segmentation, and sector-specific issue-linkage. The U.S. trade policy process is characterized by the Congress's growing reassertion of its trade policy prerogatives, the growing institutionalization of firms' access to the trade policy bureaucracy, and the growing volume and role of corporate campaign donations. The combined effect of these different policy process traits has been to facilitate the capture of banana trade policy by highly organized, particularistic, and predominantly trading interests. Although neither the WTO nor the transatlantic trading relationship ultimately “slipped” over bananas, the conflict provides scant reason for optimism concerning the future of this relationship or indeed of the multilateral international trading system, at least in as far as the latter depends on good EU-U.S. relations.

Type
Research Article
Information
Business and Politics , Volume 4 , Issue 1 , April 2002 , pp. 5 - 39
Copyright
Copyright © V.K. Aggarwal 2002 and published under exclusive license to Cambridge University Press 

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