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Banana war getting personal for buyers of luxury goods

Quelle horreur! Just when Saks Fifth Avenue hits town, we get into a trade war with Europe over cashmere sweaters and Louis Vuitton handbags.

If you can't afford a red leather purse at $650 (Saks' price), it probably won't make much difference to you if the cost shoots to $1,300 in March. But it's a very big deal to Vuitton and other makers of luxury goods, the latest targets in the Great Banana War between the United States and the European Union.

To put it simply, the Clinton Administration has threatened to slap a 100 percent tariff increase on a wide range of European imports unless the EU makes it easier for U.S. growers to sell bananas in Europe.

Foul, cries the EU. It says any change in its banana rules would hurt poor Caribbean growers, whose annual income is about equal to the cost of four Louis Vuitton satchels. And the proposed tariff increases would hurt European companies like Vuitton that "have no link with the banana dispute whatsoever," says Sir Leon Brittan, the EU's trade minister.

(For the record, the upper-crust Sir Leon calls them "BO-nahn-ahs.")

As you might suspect, there is more here than meets the mouth. The dispute also involves a big campaign contributor and efforts by other U.S. industries to crack the rich European market.

But first, the bananas.

Having spent a week with banana farmers on the Caribbean island of Dominica last year, I must confess to a fair amount of sympathy for their struggle to eke out a living. With its steep, rocky terrain and occasional monster hurricane, Dominica is a tough place to grow bananas, or anything else for that matter.

The EU has long helped Dominica and other former European colonies by giving them preferential access to the European market. That's the only way they can compete with huge U.S. companies such as Dole and Chiquita, which grow bananas at a far cheaper cost on vast plantations in Latin America.

In 1996, the United States and four major banana-producing countries complained to the World Trade Organization that the EU's system of quotas and special licenses was discriminatory. One of the driving forces behind the complaint was Chiquita's boss, Carl Lindner, who contributed enough to the Democratic Party to earn him a night in the Lincoln bedroom.

Last year, the trade organization ruled against the European banana policies. The EU made some changes, but not enough to satisfy the United States. Unless the EU amends its rules or a compromise is reached by March 3, tariffs will increase on many European imports including certain types of sweaters, handbags, chandeliers, cheeses, shortbread cookies and bath products.

The Clinton Administration planned to boost tariffs on European wines as well. But it bowed to pressure from the California wine industry, which is trying to crack the European market and feared retaliation. Other interests also may come into play.

"What you have to understand is that this isn't just about bananas," says Stanley Black, a Tampa-based consultant to the banana industry. "There are a lot of other things that really are a lot more important to U.S. interests, like beef. There are restrictions in the EU against beef bred or raised using hormones and I think the strategy of the U.S. in this is to put enough pressure on bananas to get the beef aspect involved."

The U.S. complaint against the banana policy undoubtedly has legal merit. There's also merit to the suggestion that Dole and Chiquita be given free access to the European market so long as they pay a hefty tariff. The money could be used as economic aid to help Dominica and other ex-colonies wean themselves from bananas and develop more profitable industries.

But Jacques Santer, president of the European Commission, made a good point in a letter to Clinton assailing the proposed tariff increases. "Pursuing action of this sort against the European Union, which is the United States' biggest and most open trading partner, would be a grave political misjudgment at a time when we should be working together to alleviate the world's economic difficulties."

While waiting for the denouement, I did a little research at Saks in West Shore Plaza to see just how much we consumers would be affected by an escalation of the Great Banana War.

I'm pleased to report that all of the women's cashmere sweaters seemed to be made in Hong Kong and thus would be exempt from higher tariffs. Not so the men's sweaters, which come from Britain and even at 45 percent off, cost more than most Dominicans make in a month.

After being bounced from agency to agency, I finally found someone in U.S. Customs who said soap is not among the "bath preparations" that would be subject to higher tariffs. But just in case our president changes his mind, I snapped up a three-pack of perfumed French bars for $27.

With the last $4 in my wallet, I stopped by the SFA Express Cafe and had a fruit smoothie _ made, of course, with bananas.

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