The EU and Africa

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A really interesting article appeared on the CapX feed this week about the EU and Africa.

Governments and individuals raise millions every year to help the poorer nations in what is now euphemistically called the ‘Developing World’ and yet the reality is that the EU is preventing Africa from developing and trading its way out of poverty by imposing costly tariffs on certain goods purely to protect big business in Europe.

The article is long but well worth reading in full. I’ve picked out a couple of the salient paragraphs as a starter;

There are at least three ways in which EU policies affect Africa’s ability to address its agricultural and food challenges: tariff escalation; technological innovation and food export preferences.

Take the example of coffee. In 2014 Africa —the home of coffee— earned nearly $2.4 billion from the crop. Germany, a leading processor, earned about $3.8 billion from coffee re-exports.

The concern is not that Germany benefits from processing coffee. It is that Africa is punished by EU tariff barriers for doing so. Non-decaffeinated green coffee is exempt from the charges. However, a 7.5 per cent charge is imposed on roasted coffee. As a result, the bulk of Africa’s export to the EU is unroasted green coffee.

The charge on cocoa is even more debilitating. It is reported that the “EU charges (a tariff) of 30 per cent for processed cocoa products like chocolate bars or cocoa powder, and 60 per cent for some other refined products containing cocoa.”

The impact of such charges goes well beyond lost export opportunities. They suppress technological innovation and industrial development among African countries. The practice denies the continent the ability to acquire, adopt and diffuse technologies used in food processing. It explains to some extent the low level of investment in Africa’s food processing enterprises.

This is another side of the crony-capitalist EU state that isn’t often seen but needs to be exposed so that come the time of the referendum, people have a chance to vote on the facts.

 

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