Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, May 7, 1995 TAG: 9505050053
SECTION: BUSINESS PAGE: F-1 EDITION: METRO
SOURCE: JOHN MAGGS JOURNAL OF COMMERCE
DATELINE: WASHINGTON LENGTH: Medium
Two sources familiar with the details of the meeting said in separate interviews that Kantor, President Clinton's trade representative, had been summoned to the Senate GOP leader's office for another in a series of bargaining sessions over what the Clinton administration was prepared to do to assure a prompt vote on the historic trade agreement.
The best-known of these deals was the ``Dole Commission,'' a panel of experts that will monitor decisions by the new World Trade Organization and judge whether the WTO is a threat to U.S. sovereignty.
On this day, however, the subject was bananas - specifically, bananas shipped from Latin America by Chiquita Brands International, owned by Carl Lindner, who was sitting in Dole's office, the two sources said.
Kantor was sympathetic to Lindner's complaint. The European Union planned, on Jan. 1, to impose Draconian restrictions on banana imports from Latin America - produced mainly by Chiquita and other U.S.-owned companies - protect market share for banana producers in certain other former European colonies.
More importantly, the quotas would lavish monopoly profits on the European companies that import the smaller, more expensively produced bananas from the Caribbean, Africa and Pacific islands.
Neither Kantor nor officials in Dole's office responded to questions later about the banana dispute. Calls to Chiquita officials last week were not returned. A source close to Dole did not deny that the meeting took place, but cast doubt on whether the majority leader and presidential contender could be bothered to pursue a deal for Lindner.
The EU quotas were an obvious violation of WTO rules, except for one thing - aware of how vulnerable they would be to a U.S. attack, the EU had insisted on grandfathering the banana restrictions into the Uruguay Round pact completed a year before. In the rush of deal-cutting at the end of those negotiations, the United States acquiesced.
For that reason, despite the outrage many at the trade representative's office felt about the banana quotas, lawyers at the agency believed there was no way to beat the EU in a trade complaint, one of the sources said. Any U.S. trade retaliation would be ruled illegal by the WTO, they advised Kantor.
This was presumably not what Carl Lindner wanted to hear.
The billionaire banana baron had reportedly made a huge investment in the promising European market and wanted the Clinton administration to strike back with trade sanctions.
Lindner for years has been among the largest private campaign contributors in the United States, and he was not shy last fall about using this largess to build support for his cause in Washington.
Federal records show Lindner, his companies and top aides gave $525,000 to the Democratic and Republican parties in November and December 1994, according to the watchdog group Common Cause.
At the time of the meeting last fall, Dole was laying the groundwork for his presidential campaign. Raising money is considered one of the most difficult aspects of mounting a presidential bid, and Dole's rival, Texas Sen. Phil Gramm, already had a multimillion-dollar head start.
The two sources said Dole made it clear to Kantor that, notwithstanding the legal questions regarding the case, he wanted to see a trade complaint filed against the EU and any Latin American nations that cooperated with the banana restrictions to the detriment of Chiquita.
Kantor believed at the time that Dole was prepared to hold up a vote on the Uruguay Round indefinitely, according to someone he confided in. In the weeks leading up to Election Day, conservative Republicans were attacking the agreement as a surrender of U.S. sovereignty and an unwise relaxation of budget rules.
For Kantor, the threat to the Uruguay Round apparently outweighed the uncertainty of how to handle a complaint that most said he could not win.
``That's Mickey's style,'' said one man familiar with the banana deal. ``Make the deal and figure it all out later.''
In a few moments, the deal was struck. On Oct. 17, Kantor accepted the complaint from Lindner's company. He declared on Jan. 9, after the banana quotas took effect, that the EU had violated U.S. trade law.
Things have moved much more slowly since then. Only a week ago, EU officials rejected the latest U.S. demands in the dispute.
Meanwhile, U.S. officials are trying to find some way of retaliating that does not run afoul of WTO rules, such as action against European ship lines that call at U.S. ports. While this would avoid an embarrassing censure in the WTO, it would not avert counter-retaliation by the EU.
Frustrated in his efforts to move the EU, Kantor has stepped up the pressure on Colombia and Costa Rica, which chose to comply with the quotas when the alternative appeared to be having all of their exports to Europe sacrificed. Costa Rican officials said Kantor has asked them to award more export rights to Chiquita, at the expense of Costa Rican banana suppliers.
by CNB