The dispute over the European Union’s (EU’s) regime for the importation of bananas has, at long last, been settled.

The Latin American banana-exporting countries and the United States — which exports no bananas but whose multinational corporations control the majority of the world market based on supplies from Latin America — had challenged the compatibility of the EU banana regime with the rules of the World Trade Organisation (WTO).

The EU, which resisted but lost every ruling in the WTO, made incremental changes but could never find a formula that assuaged the Latin American and US claimants.

The EU was forced to modify a regime based originally on colonial preferential market and price arrangements. They were implored to maintain the status quo by the beneficiaries of the regime, the former European colonies in the African, Caribbean and Pacific (ACP) countries.

The ACP argued that the EU had a moral obligation and was legally bound to provide preferential trade arrangements. The Latins pointed out that the EU regime was discriminatory and that they could not do without even the less than five per cent of the world market that was accounted for by the small Caricom countries.

Their need, they argued, derived from the fact that they were poorer than the Caribbean based on per capita income comparisons. The Windward Islands pointed to their minute share of the global market and the disadvantages of small-scale and hilly topography.

The WTO consistently ruled in favour of the Latin producers and US multinational firms, including Chiquita, a descendant of the infamous United Fruit Company and major donor to both political parties in the US.

At one point in the 1990s, the US and EU imposed sanctions in the form of higher tariffs as the dispute escalated into a major trade war.

Earlier this month, a settlement was reached, ending the longest trade dispute since World War II. It was technically complex, politically hypersensitive and had serious consequences for the parties concerned. It means the end of banana exporting from Caricom which, apart from Belize, was uncompetitive in price.

There are important lessons from this saga.

First, the days of preferential trade arrangements for developing countries are over. It is not compatible with the rules of the WTO. The developed countries no longer view this as an efficacious form of development aid.

Second, there are no permanent economic activities, and resources should not be wasted on propping up “sunset” but must be used to reallocate or create resources for new activities.

Third, in a world economy in the throes of profound globalisation, only the internationally competitive survive. Jamaica, the largest exporter of bananas in 1930, is already importing banana chips, so let us hope that the day will not come when we import bananas.

Fourth, the WTO’s application of its rules is justice so blind that it injures the small, poor and innocent. The real beneficiaries are the multinational corporations which dominate the world market. The small farmers of the Caribbean will be worse off and the workers in Latin and Central America will certainly be no better off. The affluent consumers in Europe will get cheaper bananas.

No wonder there are so many who question the fairness of the rules of the WTO and there is so much angst about the implications of globalisation for small developing countries.