From the Electronic Telegraph: Your cashmere sweaters and Peek Frean's Petite Beurres are still relatively affordable, but look out for your Krups espresso makers. . .

ISSUE 1415 Saturday 10 April 1999

British jobs saved after banana war climbdown, By Richard Savill, Polly Newton, and Adam Lusher BRITAIN has been taken off America's "banana war" hit list, lifting the threat to at least 1,000 Scottish cashmere jobs in Hawick and the surrounding area.

The final list will impose punitive 100 per cent tariffs on $191.4 million (#120 million) of European imports, from French handbags to German coffee-makers. But cashmere and British sweet biscuits were dropped to match the reduced penalty level allowed by the World Trade Organisation.

America had initially sought to impose $520 million (#325 million) in economic sanctions, but WTO arbitrators reduced the figure earlier this week. The reprieve for cashmere was greeted with delight in Hawick. For several weeks the mill town's workers have had to try to comprehend the intricacies of the banana war, a dispute over an international trading arrangement that has not directly concerned them.

Tony Taylor, chairman of the Scottish Textiles Association, said "The people of Hawick have been pawns in a trade war not of their making. The threat of even more job losses has now been lifted and it is marvellous news."

Almost 90 per cent of the British cashmere industry involves companies based in the Borders. American imports of cashmere sweaters from Britain were worth nearly #18 million in 1997.

The threat against cashmere was made by Washington in retaliation for the European Union's policy on banana imports. Bananas brought into the EU from the Caribbean former colonies of member states have been subject to lower duties than those imported from Latin America.

The WTO ruled that the discriminatory regime was unlawful and that America was entitled to compensation. Had cashmere remained on the hit list, it would have been a devastating blow to the Borders, which have already lost thousands of jobs through factory closures in the past year due mainly to the collapse of the Asian economies.

Jim Thomson, managing director of Hawick Cashmere and chairman of the Borders Knitwear Association, said: "The implementation of the 100 per cent tariffs would have been a catastrophe. The figure of l,000 job losses was not some sort of bargaining point. Those jobs really would have gone."

Archy Kirkwood, the Liberal Democrat MP for Roxburgh and Berwickshire, said: "It has been nerve-racking but at last we have a good outcome. The cashmere industry can now get back to the real world of a very harsh trading climate, but at least they are factors which are relevant to the market place, which bananas certainly were not."

Donald Dewar, the Scottish Secretary, claimed a personal victory, describing the decision as "a major boost" for cashmere producers and retailers. Mr Dewar, who announced the American move after a day of campaigning for Labour ahead of next month's elections to the Scottish Parliament, said: "We worked long and hard for this result. I visited the States personally and held meetings with President Clinton and his most senior ministers. I am very pleased that all the patient behind-the-scenes work has paid off and that the deal has now been delivered."

Tony Blair said the visit by the Scottish Secretary to Washington had been "an important part" of the talks. "There have been, behind the scenes, intense negotiations obviously between myself and the American government," Mr Blair said.

Brian Wilson, the trade minister, welcomed the reprieve but said many sectors remained targets of the US despite having no link to the bananas dispute. "The EU must now work with the US and the other interested parties to seek an urgent settlement," he said.

-- Old Git (anon@spamproblems.com), April 09, 1999

Answers

Thanks for the post Old Git. I had been worrying myself sick about cashmere sweaters, but now I feel better. hee hee Seriously, I was not up on this situation, and couldn't see the connection between bananas and sweaters. Does it seem odd to anyone else that we seem to have sanctions imposed on half the world and are constantly threatening more tariffs? Just asking, I'm a dunce in this area.

Old Git are you from England? I'm a hopeless Anglophile, and met my dear friend in Gloucestershire through "This England" magazine.

-- gilda jessie (jess@listbot.com), April 11, 1999.

Hi, Gilda, glad you slipped into the Banana thread. . . Yes, originally from Notts, then Yorks, and Beds. And San Angelo, TX, S.NJ coast, New Orleans, Little Rock, New Orleans again, Norfolk, VA, and Durham, NC. I've lived in New Orleans longer than anywhere else so I mostly think of it as home these days. My son is still down that way.

Foreign trade: if the monetary amount of your exports to a certain country is higher than your imports from that country, then you usually don't care what things cost when that other country exports them to you. But just about all countries have historically put tariffs on those imported goods that threaten an internal market (like the Japanese and imported cars). In addition, price supports (such as those to US farmers--and French and others) are often seen as giving an unfair advantage to certain industries over foreign exports. Also politics sometimes plays a role--the European Union has accused the US of causing problems re bananas because, they say, the United Fruit Company made huge contributions to Clinton's campaign and wants a bigger share of the European banana market at the expense of small Caribbean banana exporters.

The only reason I bring up the banana war is because a widespread trade war was threatening at one time. Such an eventuality would have made a terrible economic mess because of the amount of foreign trade between the US and Britain and European countries. The end result would have been tens of thousands of jobs lost on both sides due to suddenly expensive imported products left on the shelf. Some products are still due for a high price tag, among them German coffee-makers (like Krups and Braun). I'm not sure what else is on the list to be upped in price but you might want to keep an eye out in case it's something on your prep list, like Italian olive oil or some Parmesan cheese or something to help jazz up the basic pedestrian beans, rice and pasta.

-- Old Git (anon@spamproblems.com), April 11, 1999.

I wish I were that knowledgeable about trade. Some of it I understand, but it's never made sense to me that we ship beef overseas, but import beef from South America. I can understand importing products we don't have, pineapple and bananas, and exporting products others don't have, wheat and grains, but why sell products we have over seas and then import more of the same?

You've lived lots of places; how did you end up in the U. S.? I used to live in West Texas, and my son was born there; then I moved to CA, then back to Missouri and have lived here the past 35 years. My son lives in Colorado.

I love New Orleans and used to go there often. Once while there, our car was broken into, and when we got back home we discovered our house and garage had been burglarized. My husband, said, "Well hell he beat us back home and did it again."

I simply have to tell you my favorite story about my first trip to England. I wanted to send a package back home, so I asked the young porter at the hotel in Harrogate where I might find a Post Office. He said, "Madam, we will be glad to mail if for you." I told him that I'd rather mail it myself. Then he said, "But Madam it's a long walk and difficult to find." Finally I said, "Well, one of the women I'm traveling with said she had a package mailed to the states from a hotel in Ireland, and she never saw it again." He drew himself up ramrod straight and said, "Madam, in Ireland anything is possible!" He snatched away my package and that was that. I thought it was hilarious, but I got my package.

-- gilda jessie (jess@listbot.com), April 11, 1999.

Don't know that much about trade myself but I've lived in two major port cities and some info rubbed off. Beef: good point. How about coal? I used to see British ships coming into Norfolk to pick up coal from WV and PA. And I'd wonder if they were taking coals to Newcastle.

Yup, moved around a bit. Gathered no moss. You haven't exactly been stationary yourself. Married a Yank and came over here.

Your Harrogate hotel story is a classic. I shall have to send that to my friend at the Houston Consulate--she'll roar!

-- Old Git (anon@spamproblems.com), April 11, 1999.