This EU Won't Work

We know there are many virtuous people in the EU who want to do good in the world, which admirers believe is what the Project is about at heart. An example might be helping the poor of Africa.

Whilst the EU contributes aid to the Third World, including from Britain’s substantial foreign-aid budget, this is extremely wasteful since much of it is lost in corruption. Worse, rulers and elites who steal the aid may thereby become more powerful, more able to suppress the freedoms and dreams of their less fortunate compatriots. A better way to help would be by promoting sustainable development, and trade is a vital part of this.

In 2014 Africa as a whole earned an estimated $2.4bn from its coffee harvest (Africa accounts for nearly 13% of world output, the EU being by far the largest importer of the continent’s beans). Compare that to the $3.8bn that Germany alone earned from importing and roasting beans then re-exporting them. The EU imposes a 7.5% tariff on roasted coffee imports but surely the growers and pickers could process their own coffee? The system of subsidies and tariffs imposed by the Common Agricultural Policy (CAP) protects EU producers to the detriment of Africa’s workers, more than 60% of whom are still employed in agriculture, many on subsistence wages. It is estimated that Africa imports nearly 83 per cent of its food. Its nations are treated as raw material exporters, their efforts to add value to the materials continue to be frustrated by EU policies, suppressing technological innovation and industrial development. A sustainable future for Africa lies in trade, not aid – by retaining the value, not taking handouts. Currently African coffee growers, get some 7% of the value of roasted coffee sold in supermarkets, it’s an obvious injustice.

Americans like their coffee weak but they do drink a lot of it. Coffee is the world’s second most valuable traded commodity, behind only petroleum, and is the USA’s largest food import (though mostly from Brazil of course). It is one of the products freely traded between the USA and the 39 sub-Saharan African nations recognised by the African Growth and Opportunity Act (AGOA, https://ustr.gov/countries-regions/africa). It may of course be Trumped: although the agreement extends beyond the next two presidential terms all countries must satisfy the US that they meet AGOA criteria of good governance. A similar agreement could be made between Britain and African countries once we are free of the CAP, exactly the direction that International Development Secretary, Priti Patel, wishes to turn her department.

The EU tariff on cocoa is even more debilitating at 30% for processed cocoa products like chocolate bars or cocoa powder, and 60% for some other refined products. We have described previously how the EU exploits African waters to the detriment of local fishermen (see Shorties, “Does the EU make the world a better place?” ). For all its virtuous intentions the EU protects its own industries rather than tackling global poverty.