Hanging out for a banana?

If you’re like me, you’re no doubt hanging out for a reasonably priced banana. Hold that thought. The reason for your banana craving can provide you with valuable insights about the unfairness of the global economy and why third world countries will remain at the bottom of the economic food chain for decades to come.

First, I must declare my interest. I’m a banana tragic. I’ve eaten two banana sandwiches for lunch nearly everyday for the past 21 years. They are the perfect lunch meal. They are beautifully packaged in their easy to remove skin; they don’t splat when you squash them between two slices of bread; they’re filling but don’t pack too much punch; tasty too, but not so rich that you could ever get sick of them.

At about two bucks a piece (about the price of a Mars bar) they’re still great value. Problem is many shops don’t stock them. There are no worthy substitutes. Tomatoes splat big time and you need to be a surgeon to peel an avocado.

Even if your banana craving isn’t as desperate as mine, you should still inquire why it is that you can no longer readily indulge in this luxurious treat.

The problem goes far deeper than cyclone Larry which wiped out most of Australia’s banana crop several months ago. You see there is a worldwide over supply of bananas. They are literally falling off trees, in places such as Ecuador, Brazil, Colombia, Costa Rica and Mexico, the Philippines, China and Indonesia.

Australia could readily import enough bananas so that the whole nation could join me in having two-banana sandwiches every lunch time. Moreover, the imports would be far cheaper than the pre-cyclone Larry prices we were used to paying and the bananas would be every bit as tasty. Yet, we refuse to do this because we want to protect the local industry when it cranks up again.

What about free trade you say, and the World Trade Organisation's objective of opening up global markets? Well it’s a fiction. It doesn’t work. Not in relation to bananas and not in relation to most goods produced in third world countries.

The rhetoric of free trade, which has been trumpeted so loudly over the past few decades, has done nothing to cure the ills of the third world. The number of chronically hungry people has hardly changed since the 800 million or so recorded approximately a decade ago. The British Prime Minister Tony Blair was correct when he noted several days after the tsunami that there is a tsunami-scale tragedy in Africa every week.

The WTO ideal of free trade has little prospect of improving the plight of the third world. All deals struck as part of this pact are on the basis of negotiation, not principle. As with any negotiation, self-interest prevails and the stronger party nearly always comes up trumps. Thus, it is not surprising that as a result of subsidies European cows earn $2 a day, while people in sub-Saharan Africa subsist on less than $1 a day.

First world countries invariably find ways of resisting competitive third world imports that threaten local industries. Bananas are a classic example. First world countries have tied up the dispute settlement arm of the WTO in knots for decades trying to prevent banana imports.

Australia won’t import any bananas because of the supposed risk of incidentally importing pests and disease. This risk is real in relation to some banana-producing countries. Not so in relation to the Philippines which has very strict and effective mechanisms for controlling potential pests and diseases. Of course there is some risk that importing bananas will introduce pests or plant disease into Australia, but this risk is not meaningfully greater than that posed by Australian food and livestock exports to the importing countries. It is remote and should be ignored.

In fact about three years ago, Australia's quarantine services opened the way for the import of foreign bananas. However, this was overturned in the lead up to the last federal election, following heavy pressure by the National Party, worried about the livelihood of some of its constituency.

As a community it is only natural that we want to protect our local industries. However, we also have an obligation to distribute our wealth to those in greatest need. One of the most effective mechanisms for doing this is to purchase cheap quality imports. The government should not inhibit us from making such choices by giving disproportionate weight to quarantine matters.

So unless you see bananas packing the shelves at around two bucks a kilo in the next few months, you can be sure that the WTO’s mission of freeing up global trade in order to enhance global flourishing continues to be a sham - except of course for European cows.