Regional Trade Agreements

In a fact sheet about Regional Trade Agreements, Global Growth has these excellent items.

But the ugliest Regional Trade Agreement in the world is the EU treaty, Article 133 of which reserves exclusive competence in matters of trade policy to the Commission in Brussels, signatories having renounced national sovereignty in this matter. So Britain, a nation which in 1846 first declared a policy of unilateral free trade, a policy which contributed mightily to making Britain the greatest trading nation of the age, would be acting illegally to do so again.

Many people are of the opinion that the EU is a free trade area. It is nothing of the sort, it is a customs union. What this means is that the EU controls the external tariffs of member countries and even collects the money itself. Member countries are only allowed as much free trade with third parties as the EU permits.

Currently the British government, with wide public support, wants to lift the barriers to entry for Asian countries hit by the tsunami, yet the EU refuses to permit it, and instead it enforces the collection of $250m in tariffs a year from East Asia.

After a disaster, nothing can replace the emergency aid that is given in the immediate aftermath. But to not offer the sufferers the chance to play a bigger part in their own recovery is cruel and hypocritical. Bear this in mind the next time a European Leader talks the talk on poverty. Gordon Brown, we are watching you.

In Benin cotton accounts for 85% of total exports and 20% of the national income. Benin pays no subsidies to farmers, yet despite being very competitive Benin’s exports to the EU are being blocked by Italian and Greek intransigence in Brussels. To protect domestic cotton producers those two countries blocked the benefits of British and EU free trade with Benin’s cotton farmers. Benin’s cotton industry is now in crisis and with it the livelihoods of over 10 million people in West Africa who depend directly on cotton.

In the EU cotton is at best a marginal crop, supporting the incomes of a few people. In order to protect those already lucky (on a global scale) people, we wilfully destroy the lives of some of the poorest people in the world. A note here: Poverty Kills. This is not about whether farmers in the third world have a little extra income it is about whether they can afford to see a doctor when ill, whether their children grow up stunted physically and mentally, whether they have to go hungry. This is what our protectionism does to them. Don’t let a smarmy sweet talking politician make you think otherwise. Update: According to KickAAs, if the USA eliminated cotton subsidies, revenues for cotton farmers in West and Central Africa would increase by $250 million. Simple isn't it.