#Thisweekinhistory: The WTO sided with the US in its compliant against the EU over the latter's allegedly discriminatory tariff regime against LATAM/US banana imports. This marked one of the most long-winded trade battles in WTO/GATT history as it took ~20 yrs to settle 1/n

The background: The EU provided tariff free & almost unlimited access to banana growers from former colonies in the Caribbean. The logic, as per some writers, is for these countries to develop w/o the need for foreign aid. This primarily hurt LATAM producers...2/n

who were among the largest exporters of bananas to the EU & who faced tougher EU entry barriers. In 1993 therefore, Colombia, Costa Rica, Guatemala, Nicaragua, and Venezuela complained against the EU under the (then) prevailing GATT regime. They were later joined by the US 3/n

which is where the story gets interesting. US banana exports to the EU were insignificant & yet it chose to take on this battle. Why would this be an a-peeling (teehee) venture for a country with no stakes, you may ask. US corps controlled much of the LATAM banana production 4/n

which accounted for ~3/4 of the EU export market. The more 'noble' reason for this is to protect free trade. The US went bananas & slapped retaliatory tariffs against the EU, some of which went up to 100%. These products included pecorino cheese & cashmere sweaters 5/n

The WTO supported the US & LATAM claims, and even condoned the tariffs. In April 2008, a panel confirmed that the EU continued to violate WTO tariff rules. The matter finally ended when the EU agreed in 2009 to reduce tariffs from 176 EU/tn to 114 EU/tn within 8 yrs 6/n

An agreement to end all cases in this matter was signed in 2012. A few lessons from this given the current state of affairs: 1) Institutions are important!! Imagine a situation where a forum such as the WTO did not exist. A military escalation might not have been unthinkable 7/n