The decade-long transatlantic banana dispute was not a traditional trade conflict stemming from antagonistic producers’ interests. Instead, this article argues that the banana dispute is one of the most complex illustrations of the legal and political difficulties created by the nesting and overlapping of international institutions and commitments. The contested Europe-wide banana policy was an artifact of nesting – the fruit of efforts to reconcile the single market with Lome´ obligations which then ran afoul of WTO rules. Using counter-factual analysis, this article explores how the nesting of international commitments contributed to creating the dispute, provided forum shopping opportunities which themselves complicated the options of decision-makers, and hindered resolution of what would otherwise be a pretty straightforward trade dispute. We then draw out implications from this case for the EU, an institution increasingly nested within multilateral mechanisms, and for the issue of the nesting of international institutions in general.
The EU is a formidable power in trade. Structurally, the sheer size of its market and its more than forty-year experience of negotiating international trade agreements have made it the most powerful trading bloc in the world. Much more problematically, the EU is also becoming a power through trade. Increasingly, it uses market access as a bargaining chip to obtain changes in the domestic arena of its trading partners, from labour standards to development policies, and in the international arena, from global governance to foreign policy. Is the EU up to its ambitions? This article examines the underpinnings of the EU’s power through trade across issue-areas and across settings (bilateral, inter-regional, global). It then analyses the major dilemmas associated with the exercise of trade power and argues that strategies of accommodation will need to be refined in each of these realms if the EU is to successfully transform its structural power into effective, and therefore legitimate, influence.
Two alternate visions for shaping and explaining the governance of economic globalization have been in competition for the past 20 years: an ad hoc, laissez-faire vision promoted by the United States versus a managed vision relying on multilateral rules and international organizations promoted by the European Union. Although the American vision prevailed in the past decade, the current worldwide crisis gives a new life and legitimacy to the European vision. This essay explores how this European vision, often referred to as ‘managed globalization’, has been conceived and implemented and how the rules that Europe fashioned in trade and finance actually shaped the world economy. In doing so, we highlight the paradox that managed globalization has been a force for liberalization.