Wednesday, March 07, 2007

Who's afraid of banana?

My baby boy loves banana. I was told by his doctor that banana is good for babies. I so assume that many parents feed their babies with bananas, too. For them, and for the babies' sakes, less expensive banana is therefore a good thing.

Apparently, the government (and Indonesian Banana Association -- of course this is not their name, I made it up) disagree. So far, Indonesian banana market has been a good sale place for cavendish bananas from the Philippines. Last year, the price was good (as consumers, we don't care why it could be less expensive, we only care that it was relatively not expensive). As it turns out, and if the government accusation is correct, them Philippinos were doing a dumping strategy. That is, they were selling bananas at lower price to us than to their own folks.

And the government had to do something: cheap bananas are not good for the economy. So they came up with a decree imposing an anti dumping tariff on cavendish bananas from the Philippines (if you are curious, it is the Ministry of Finance's Decree No. 81/PMK.010/2006).

Ah, again.


  1. Way back in the early 90's there was this so called "Banana Wars" between the EU vs. the US and Latin American banana exporters. The dispute was prompted by the EU banana regime, which discriminates Latin American bananas in favor of bananas from former European colonies. At that time the EU impose tariff rate quota, along with licensing requirements, and other discriminatory rules such as classifying importers into three to groups to allocate import licenses. Thereby reducing Latin American share in EU banana market. EU is a large importer of bananas which constitute about 40% of world banana trade. This also would hurt the large US distributors, since they distributes bananas from Latin America, with the exception of Ecuador.

    This was one of the first cases to be brought under the new WTO dispute settlement mechanism. The case was also interesting because the USTR (United States Trade Representative) also files claims covering the service sector, i.e. distributors. Back then what was considered marketable service was legal or accounting services and not the service of transfer of goods.

    Anyhow, the dispute took almost a decade to settled. It was settled in around 1999-2000.

  2. didn't garuda poison a man one time? I'm not surprised that they can resort to any type of distasteful acts ;|

  3. Pasha that was a great rejoinder! Thanks!