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Eurosceptic Bloggers

Sunday, November 28, 2004

Why is free trade coffee illegal?

The Adam Smith Blog has a great answer for all those who blather on about fair trade coffee.

I sometimes hear it argued that free trade has failed coffee farmers, and that we need fair trade to help them. This is rather puzzling because free trade coffee is illegal in the European Union. Instead, we have a choice between coffee with a price artificially increased by the EU, and coffee artificially made more expensive by the EU which we then choose to pay a fair trade supplement for as well.
Because countries that produce coffee can only export the raw material without punishingly high tariffs, they are shut out of more value added parts of the supply chain. If they were allowed to sell processed products to European Markets, all of the big coffee companies would be building new factories in these poor countries, employing more people and helping their economies to develop. Instead we have trapped these countries in the lowest value part of the chain. So true free trade would be a boon for consumers and producers alike.

1 comment:

Kevin Jackson said...

Hey, great blog! Sounds like you need coffee recipe.

I love coffee and did a keyword search on coffee recipe and came up with your site. The association was close, anyway. Take care! Dave