Why are Europe’s latest trade deals unfair?
The trade deals unfolding under the European Commission’s latest trade strategy
‘Global Europe: competing in the World’ are heavily influenced by the interests of European corporations, who want access to new markets and resources to maximise their profits. However, the deals could have disastrous impacts on jobs, livelihoods, human rights and the environment in the developing countries that sign up.
The countries being targeted by these latest trade deals are
shown here.
Our four main areas of concern relating to these deals are explained below. For more details on these, please see the
MEP lobby pack
1. Destroying jobs and local industries
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The Problem:
The EU wants to sell its manufactured and agricultural goods to developing countries rather than giving them the chance to develop the capacity to make some of these goods themselves. The EU is pushing developing countries to reduce import taxes (tariffs) on these European goods, meaning that they will be unable to protect their emerging industries and the jobs that go with them. Protecting emerging industries from overseas competition is a key tool that the US and the UK used when they were developing. |
DID YOU KNOW?
Imports of tomato puree, produced by subsidised European famers, into Ghana have squeezed out local production as the market share of domestic tomatoes shrunk from 92 to 57 per cent between 1998 and 2004. [Paasch, A (2008) Floods – Man Made: European Trade Policy Violates Right to Food in Ghana – chickens and tomatoes, German Watch, Bonn
http://www.germanwatch.org/handel/tomachi.pdf
2. Exploiting natural resources
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The Problem:
The EU wants to increase its access to cheap supplies of raw materials for big European corporations, and this means pushing developing countries to remove export restrictions. However, many countries that are rich in resources like minerals, forests and oil, or who produce a lot of food for export, use policies like taxes and export restrictions to control how much can be exported. Removing these policy options will make it more difficult for countries to make sure their natural resources aren’t over-exploited, ensure they have enough food to use locally, and encourage local industries to process these raw materials. |
DID YOU KNOW?
Many countries with over-exploited resources like Vietnam, Cambodia, Laos, Mongolia and the Phillipines have introduced export controls as a means of limiting the harvest of their forest products and protecting their forests [United Nations Economic Commission for Europe: 1999; Forest Policy & Economics journal : 2005]
3. Contributing to the Food Crisis
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The Problem:
The EU wants to further increase access to overseas markets for highly subsidised European agricultural goods by taking away the ability of poor countries to impose tariffs on food imports. This will destroy the livelihoods of small-scale farmers, increasing both poor countries’ vulnerability to fluctuations in global food prices, and global reliance on unsustainable, industrially produced food stuffs. |
DID YOU KNOW?
During the food price hikes and widespread food crises in summer 2008, Ugandans were paying roughly the same price for rice that they always had. This was because over previous years the Ugandan government had restricted rice imports from abroad, making local production the priority and ensuring a secure and affordable supply of rice for Ugandans irrespective of what was happening in the global markets. [Pascal Zachary, G (2008) Africa plays the Rice Card, Foreigh Policy, Washington
http://www.foreignpolicy.com/story/cms.php?story_id=4306
4. More rights for big companies, fewer rights for people
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The Problem:
The EU wants to reduce the restrictions faced by big European companies operating in developing countries, by insisting on liberalisation of rules on investment, services and government procurement. In some cases such liberalisation may give foreign investors further scope to operate in ways that they could not get away with in Europe. For example by paying poverty wages, polluting the local water supply, or displacing people from their home. The policies the EU are trying to restrict ensure that the activities of foreign companies benefit local people and the local economy, and prevent foreign companies from abusing the environment and human rights. |
DID YOU KNOW?
The EU is insisting that India open up its markets to the EU’s major retail corporations, like supermarkets. The government of India has so far said it will not liberalise this sector – but if it is pressured into doing so, the entry of European multinationals could squeeze out millions of poor people who currently work in small shops or as street sellers and who have almost no alternative ways of making a living.[Powell, S (2008) The EU-India FTA: initial observations from a developmental perspective, Traidcraft, London.
http://www.traidcraft.co.uk/international_development/policy_work/policy_resources/
policy_reports.htm
For more information, please see the following members’ documents on the Global Europe strategy :
- Global Europe: Briefing Note (pdf)
Friends of the Earth, June 2007
- Global Europe: position paper (pdf)
War on Want, April 2008
- Inside Global Europe (pdf)
World Development Movement, May 2008
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