How to Become a Top Banana

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Two weeks later, on Dec. 21, products imported by Gillette, Mattel and fur retailers, as well as those of some two dozen other trade groups and industries that testified at the hearing or lobbied the USTR, were dropped from the list.

More lobbying ensued. On April 19, when the final list was published, most of the goods once proposed for high tariffs had been stricken from the list. Only nine types of products were covered.

In announcing the final list, Barshefsky, who had replaced Kantor as U.S. Trade Representative, reiterated that the higher annual tariffs on European goods were in retaliation for Europe's refusal to change its import rules on bananas.

"It is proof that the system works," she said. "When members [of the WTO] refuse to live by the rules, they will pay a price." There was one major oversight in Barshefsky's reasoning: the wrong people were going to pay the price.

The Clinton Administration salvo aimed at giant European corporations hit Rick Reinert, Arthur Kaplan, Timothy Dove and other small entrepreneurs, whose only connection to bananas is to eat one every now and then.

"I Thought It Was a Joke"
Reinert is--or more accurately was--the typical American small-town, small-business success story. He grew up in LaPorte, Ind., and attended Western Kentucky University before enlisting in the U.S. Army in 1975. He and his wife, whom he met during his Army stint in Germany, started their wholesale bath-supplies business in 1994 out of the family garage in Summerville, S.C., a pine tree-studded bedroom community of Charleston. "We began very meagerly," says Reinert. "We didn't have one account." By knocking on doors, attending an endless parade of trade shows and selecting the right representatives, they built a solid customer base of some 2,000 stores--gift shops, beauty salons, boutiques, grocery stores, independent pharmacies and a major drugstore chain. Their most popular items, which they buy from a German supplier and account for 60% of sales, are aromatic foam baths scented with herbs from lavender to rosemary. And these items were among the ones singled out by the USTR office for its trade war with Europe over bananas.

Reinert remained blissfully unaware until January 1999 that he was on his way to war. That's when he first heard about the proposed tariffs. "I was at a Portland [Ore.] gift show...and I happened to read this little blurb in TIME about bath products. I thought it was a joke." He investigated. "It was no joke. We were on the potential hit list."

That's when Reinert started writing letters and calling everyone--his Congressman, his Senator, the USTR. It was during one of many conversations with a ustr staff member that he was told, in effect, it was his own fault that he had got caught up in the trade war. After all, the USTR had published a list of the targeted imports in the Federal Register. He should have attended the hearings in Washington, just like Gillette (annual sales: $10 billion) and Mattel ($5 billion). If he had, then Reha Enterprises (less than $1 million) might have been removed from the list as well.

Reinert is still fuming. "That's ridiculous. I mean, do you read the Federal Register? Does anybody in Summerville read the Federal Register?" The trade official suggested Reinert should have hired a lobbyist in Washington to keep him briefed. That one didn't go over well either. "I mean, we've got two kids. It's a small business," says Reinert. "Who in his right mind would come up with stuff like that?"

"We're only [six] years old," Reinert says. "Cash flow is always a problem. Finance is always a problem. But they are just destroying the base of our company."

What other advice has Reinert received from officials in the U.S. Trade Representative office and from the staffs of members of Congress?

He says one official urged him, off the record, to break the law--to change the number on the Customs invoice so it would appear that he was importing goods not subject to the tariff. Reinert demurred. "I could end up in jail for it," he says. "I don't want to be the only one without a chair when the music stops."

Another official chided Reinert for not buying American, a rebuke that angered him. Reinert responded, "'Why don't you go out in your parking lot and count all the Mercedes and Porsches, BMWs, Lexuses and Toyotas?' I mean, these are just ridiculous arguments."

In response to repeated calls and letters, Reinert heard personally from Barshefsky last August. The news was not good. Reinert, she suggested, was standing in the wrong place at the wrong time when the war started. She explained in her best bureaucratic language that it was legally impossible to remove Reinert's bath products from the tariff list. Said she: "We have examined the question of whether [the USTR office] has the authority to grant exemptions to small businesses, such as yours, that are severely harmed by the increased tariffs... We have concluded that the relevant statute...does not provide such authority to USTR."