A wise and frugal government which leaves men free to regulate their own pursuits of industry and improvement. This is the sum of good government. - Thomas Jefferson
EU protectionism killing Africa’s poor
Mon, 04/10/2010 - 9:24pm
Mon, 04/10/2010 - 9:24pm
The European Union member nation of Sweden has a very short summer. In fact, the soil is frozen for several months, and the cattle have to be indoors most of the time. Not your ideal place for agriculture, you would think.
The EU’s infamous Common Agricultural Policy (CAP), however, changes the paradigm. The CAP is a complex array of agricultural tariffs, quotas and subsidies to farmers within the EU. The CAP means the seemingly ridiculous in agricultural practice, becomes a realistic possibility, so that under the CAP the freezing country of Sweden can maintain a series of sugar mills, for example.
The result is a double-whammy inflicted upon European consumers. Not only do European consumers pay higher prices for all products containing agricultural produce, they are also penalised a second time in having to pay the taxes that fund the initial subsidies and the administration of the tariffs and quotas.
And who is the victim in all of this? Most heinously and conspicuously, it is the poor of Africa, but also other primary producing countries that require export markets, notably Australia.
If any of you have watched China over the past 30 years or so, you’d know how a third world country goes from poverty to prosperity, through trade. Africa has an obvious comparative advantage in agricultural production given its climate and abundant unskilled labor. If the EU were to close down the CAP, it would be a massive launch pad for African development.
But the EU won’t budge.
It would be an understatement to say that African countries are not happy with this situation. Some are so infuriated that they have labelled the CAP as racist. Their anger is well justified.
Amazingly, in addition to being denied their natural market, Africa is the dumping ground for the EU’s excess, government-subsidised produce. Lack of anything resembling a market in EU agricultural production means any balance between production and consumption goes down the drain, and Africa becomes the innocent victim.
Even the United Nations, an EU fellow traveller says EU protectionism deprives developing countries of nearly $700 billion+ in export income a year. That's almost 14 times more than poor countries receive in foreign aid. EU protectionism is a continuing tragedy, causing unnecessary poverty, hunger and disease.
Far from considering a rethink on protectionism, the EU is now considering further protectionist measures under the cloak of green, suggesting that if countries do not tax carbon, the EU will move to increase barriers. Australian Trade Minister Craig Emerson, one of the few global warming sceptics within Labor Party ranks, has correctly spoken out against these measures, which will harm competitive Australian exporters.
"We won't cop governments cloaking protectionism in this sort of green cloak of respectability, where it's just old protectionism," Dr Emerson told Australian Agenda on Sky News.