From 1993 to 2009 the Banana Trade Wars were waged. What was the problem? Two American companies, (United Fruit Company and the Standard Fruit Company) due to their dominance of the banana trade, had so much influence over certain areas of Latin America that those areas came to be called 'banana republics'. I kid you not! The trade war came in when the European Commission, concerned by this state of affairs, imposed a quota and tariff on goods from former colonies including those in Latin America. These effected United States banana trade. With me so far? The World Trade Organization ruled these restrictions unacceptable. So the European Commission came up with a new banana control policy. Then the U. S. said 'if you do that we'll impose $500 million in trade sanctions against Europe'. So there. This kind of thing goes back and forth for years until the interested parties got together in 2009 and hammered things out. And that, my dears, is where 'banana republics' come from.Source: Food: In Context as accessed through Gale Virtual Reference Library
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The term "banana republic" was first used by O. Henry in 1904 and relates to fruit companies controlling the governments of several nations due to their influence. That's where the "banana republics" come from, not a trade war that existed a hundred years later.
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