The Trade War between America (USA) and the European Union (EU) :: essays papers

Chiquita Brands International Inc. is best known as the worlds number one distributer of bananas, which account for more than half of its sales. For the past decade, Chiquitas sales have dropped dramatic eithery and the company is now on the verge of bankruptcy. Currently, Chiquita is trying to lift filing for a Chapter 11 by attempting a major financial restructuring of their debt. There atomic number 18 many factors that have contributed to the companys downward spiral, although all of these factors are linked to the trade barriers imposed by the European Union on banana merchandises. The European Union enacted import restrictions on bananas in 1993, and just recently, is attempting to revise the old regime in order to comply with the World Trade Organization. The EU is preparing to introduce a new import system dubbed first-come first-served which they believe will be a WTO compatible system. Chiquita filed a lawsuit in January, 2001 against the European Union seeking r eparations in the amount of $525 gazillion for their losses that resulted from the old biased import system (Palmer). Chiquita is just one of many companies that were affected by this biased import regime, but some early(a) companies still managed to work around the import restrictions. Chiquitas rivals, Dole Food and Fresh Del Monte, although bruised as well by the European restrictions and falling banana profits, are in much better shape. Both have managed to increase their market share in Europe, largely at Chiquitas expense (Alden). Chiquita, however, sought proscribed and fought a political battle against the European Union with the United States government backing them. The old EU import regime was not only an output for the companies involved, but for the United States as a whole, since it affected bananas and other agricultural products sold in the US. The regime initially was enacted in 1993, and was subsequent ruled in 1997 to not be in compliance with the W orld Trade Organization (PR Newswire). The regime was designed in part to protect less(prenominal) efficient banana growers in former European colonies. Chiquitas management has complained for years that the policies of the EU have cost the company millions by favoring bananas from Caribbean producers in former European colonies. The EUs rules were judged to discriminate in favor of growers in EU territories and the Caribbean at the expense of Latin American producers and U.