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the economic benefits of trade are, for the most part, a generally accept truth. However, not all countries that have embraced trade have seen a concomitant rise in the growth.

Indeed, countries can be classified into three broad categories :


  • winning globalizers who have increased trade and and seen increased growth

  • non-globalizers, who who eschew trade and have unsurprisingly seen little accompanying growth

  • the losing globalizers who have increased trade but not seen growth

tragically, many African countries fall in the third group, why ??

because it comes down to politics !


in an uncertain world, Western countries - notably France and US - are fearful of relying on other nations for their food in the event of a global war.

Moreover, elected Western politicians have remained keen to protect their agricultural markets, and win the backing of the powerful farming lobby. the net result is protective world of trade restrictions and barriers thrown up around the West, to keep African and other developing regions produce out. but developed markets are crucial in terms of both purchasing and power size, for African trade, which depends on such countries for much of its export revenue.

the members of the OECD - a club of wealthy nations- spend almost $300 billion on agricultural subsidies (based on 2005 estimates). this is almost three times the total aid from the OECD countries to all developing nations (of course, some aid advocates suggest compensating Africa for this imbalance with more..aid !)

estimates suggest that AFrica alone loses around $500 billion each year because of restrictive trade embargoes - largely in th form of heavy subsidies by Western governments to Western farmers.

in the US alone, the total annual amount of farm subsidies stands at around $15 billion and that number is rising. As a share of farmers's income, subsidies rose from around 14% in the middle of 90s to 17% in 2009. the 2002 US Farm Security and Rural Investment Act gave US farmers nearly $200 billion in subsidies for the subsequent ten years - $70 billion more tha the previous programe ! and represented as much as an 80% increase in certain subsidies !

the Europeans are just as protective.

the CAP (Common Agriculture Policy) eats into around half of the European Union's budget of Euro127 billion (direct farm subsidies are alone are worth nearly Euro 40 billion) and EU subsidies are approximately 35% of famers' total income !

what means is that each European Union cow gets $2.50 a day in subsidies, more than what a billion people, many of them Africans, each have to live on every day !

For the West, it would appear that everything is sacred : steel, cotton, sugar, rice, wheat, corn, soybean, honey, wool, dairy, produce, peanuts, chickpeas, lentils and even mohair...

These subsidies have a dual impact. Western farmers get to sell their produce to a captive consumer at home above world market prices, and they can also afford to dump their excess production at lower prices abroad, thus undercutting the struggling African farmer, upon whose meager livelihood the export the export income crucially depends. With the millions of tons of subsidized exports flooding the market so cheaply, African farmers cannot possibly compete.

look at what has happened to two of Africa's chief exports: cotton and sugar, both of which have to contend with their Western counterparts producers :

in 2003, US cotton subsidies to its farmers were around $4 billion. Oxfam has observed : 'America's cotton farmers receive more in subsidies than the entire GDP of Burkina Faso, three times more in in subsidies than the entire US aid budget for Africa's 500 millions people !
Yet, the livelihoods of at least 10 million people in West and Central Africa alone depends on revenues from cotton, including some 6 million rural households in Nigeria, Benin, Togo, Mali and Zimbabwe !

Want to read more astonishing facts ?

jump on Best seller book from the Zambian economist Dambisa Moyo - Dead Aid, why aid is not working and how there is a better way for Africa - 2009
 

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Moreover, elected Western politicians have remained keen to protect their agricultural markets, and win the backing of the powerful farming lobby. the net result is protective world of trade restrictions and barriers thrown up around the West, to keep African and other developing regions produce out. but developed markets are crucial in terms of both purchasing and power size, for African trade, which depends on such countries for much of its export revenue.
Today appeared an article authorized by the German Minister for Economic Cooperation and Development in the newspapers in Germany. I translated it, you find it in the "African Business and Economy News" thread. There you will find a few answers.

See Africa-EU-Trade - German Econonomic Cooperation and Development Minister Müller calls for a general exemption from customs duties and quotas for African goods
 

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Discussion Starter #4
Well, I’ve just read your report.

I dont believe that Germany (or any European leaders) has the aim to enhance trade between Europen and Africa, nor the desire to create a fair-trade between both continent.

Actually, Germany - the largest economy in Europe and the biggest contributor to the Eurozone - and its neighbours are scared to death with the threat of a massive immigration influx.
Immigrants coming from Africa, Southern Asia, war torn middle east have propelled far-rights and populism rethoric to all time high across western Europe.

moreover, it’s expected that Africa’s population may double in the next 50 years.
Such terrifying perspective are pushing European leaders to upgrade their relationship with the South and pressuring them to ‘develop’ and enhance their economic priorities.

For Europe, this nightmare scenario - invasion of poorly uneducated savage and backward immigrants - (that’s how vast majority of European perceive them) started few years ago with the collapse of Libya - the gateway of Europe - then the collapse of Syria, Afghanistan, Irak, South Sudan etc…

Today immigrants reaching European shores are soaring by the hundreds of thousands. Tomorrow they could be in the ten of millions: such abhorrent future is a serious threat for Europe.

I came across many European outlets and newspapers : lemonde (france), Der Spiegel (Germany) EL Pais (Spain) , Le Soir (Belgium) , The DailyTelegraph (UK)
Read the comments and the tone displayed and the paranoid fear expressed. The immigrant crisis is golden opportunity for populist nationalism and their political gains are soaring.

How to mitigate this nightmare ? Economic development. The very recent peace in the horn of Africa (Eritrea/Ethiopia) is highly welcome and cheered by European leaders. thus they are willing to finance local industries, infrastructure, energy…in order to keep Africans in Africa ! Previous policies have terribly failed.

It’s all about geo-political dynamic.
 

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Well, I’ve just read your report.

I dont believe that Germany (or any European leaders) has the aim to enhance trade between Europen and Africa, nor the desire to create a fair-trade between both continent.
Some other voices say that it already happened, tariffs are low to non-existent and customs duties are very low for African products going to Europe. These other voices say that the problem is on Africa's side. First, due to the non-existence of an economic African union, trade barriers between African countries make it extremely expensive to develop the African economy. Second, due to the advanced European market and inner-European ties, products from Europe exported to Africa are so cheap, that African products have no chance to compete.

These voices call a.) for the African Economic Union to come true immediately to be able to speak with one voice and to reduce the barriers for trade among the African countries to be as competitive as Europe - and b.) they call African countries to raise customs duties and tarriffs on imports from Europe. Not excessively like those on car imports, but in a harmonized manner across Africa.

Actually, Germany - the largest economy in Europe and the biggest contributor to the Eurozone - and its neighbours are scared to death with the threat of a massive immigration influx. [...] moreover, it’s expected that Africa’s population may double in the next 50 years.
Such terrifying perspective are pushing European leaders to upgrade their relationship with the South and pressuring them to ‘develop’ and enhance their economic priorities. For Europe, this nightmare scenario - invasion of poorly uneducated savage and backward immigrants - (that’s how vast majority of European perceive them) started few years ago with the collapse of Libya - the gateway of Europe - then the collapse of Syria, Afghanistan, Irak, South Sudan etc… Today immigrants reaching European shores are soaring by the hundreds of thousands. Tomorrow they could be in the ten of millions: such abhorrent future is a serious threat for Europe.
The issue is the universal human rights and the related right to seek Asylum. If those would not exist, Europe would simply close borders with all African countries and all (non-educated) immigrants will be sent back to Africa. But the universal right to seek Asylum exists. It needs to be scrapped somehow, the alternative to that is the collapse of the European Union. Germany for example is the most sought country for the immigrants arriving in Europe. Around 25% of the people living in Germany have an immigration background right now. This right for seeking Asylum will be removed quite soon if all attempts to reduce the wave of immigrants will result in nothing. In the future and foreseeable, Europe will enforce the same system, the USA is using. Educated people are allowed to enter, others not.

How to mitigate this nightmare ? Economic development. The very recent peace in the horn of Africa (Eritrea/Ethiopia) is highly welcome and cheered by European leaders. thus they are willing to finance local industries, infrastructure, energy…in order to keep Africans in Africa ! Previous policies have terribly failed.
Not sure. The main task is to set up a true African Union very much like the European Union. The second task is to implement a proper family planning in Africa. The third task is to ensure a good education of the (fewer) youth growing up. And only the fourth task is to develop economic ties between Africa and Europe. The current development in the Horn of Africa is impressive and it needs to continue and to speed up.

If all that fails Africa will become a "failed continent" and Europe will definitely close all borders.
 
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