Hidden European Union Trade Regulations: The Case of the Banana Import Regime and the Lack of Perception

14 Pages Posted: 4 Mar 2021

See all articles by Wolfgang H. Schulz

Wolfgang H. Schulz

Zeppelin University

Christina Edye

Zeppelin University, Friedrichshafen

Oliver Franck

Zeppelin University, Friedrichshafen

Date Written: January 13, 2021

Abstract

Given the current Trump´s stated trade policy it is interesting how the EU has established silently in the past trade barriers. The banana regime (BR) has been one of the most politically sensitive, technically complicated and economically complex legal disputes. The BR has started after WWII as a protection measure for former European colonies. With the single European market, a European-wide import regime was established. BR was introduced, even though the EC had to know that it conflicted with international trade rules. The paper shows the various effects caused by the banana import regime. The banana price increase reduced the banana consumption, which led to a dead-weight loss in the EU and welfare losses of the exporting countries. On the other side, the demand for substitutes (e.g., apple, pears) increased. The efficiency of the supply chain was impaired leading to additional environmental pollution. The regulation created incentives for customs fraud. The organized crime (Mafia) received an enormous cash inflow. The BR is a deliberate violation of international law; it reduces consumer welfare, it harms environment and sustainability and leads to an inequality of income distribution. Against this background, the paper examines why neither consumers nor European politicians perceived the BR as a problem, why was there no public pressure, why there was no ecological resistance, and why the WTO-negotiations could be delayed so long.

Keywords: banana market regime, trade policy

Suggested Citation

Schulz, Wolfgang H. and Edye, Christina F. and Franck, Oliver, Hidden European Union Trade Regulations: The Case of the Banana Import Regime and the Lack of Perception (January 13, 2021). Available at SSRN: https://ssrn.com/abstract=3765483 or http://dx.doi.org/10.2139/ssrn.3765483

Wolfgang H. Schulz

Zeppelin University ( email )

Am Seemooser Horn 20
Friedrichshafen, Lake Constance 88045
Germany
+491734638421 (Phone)

HOME PAGE: http://www.zu.de

Christina F. Edye

Zeppelin University, Friedrichshafen ( email )

Am Seemooser Horn 20
Friedrichshafen, 88045
Germany

Oliver Franck (Contact Author)

Zeppelin University, Friedrichshafen ( email )

Am Seemooser Horn 20
Friedrichshafen, 88045
Germany

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