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July 07, 2005

Trade and Those Cocks in the EU.

Despite this being a family blog you might want to substitute the female for the male in that title in order to get the full flavour of my feelings on the cretins who run the European Union trade policy.

It is deliberately designed to keep the poor countries poor. Bastards.

You are aware of the huge coffee and cocoa growing industry here in the EU? Well, yes, quite, so we’re not trying to protect any local farmers or anything now are we, not even the odd bunch of subsidy hungry parasites that are the French peasantry.

Stumbling and Mumbling has posted up the file of import duties into the EU (warning, big .pdf).

Coffee:

Coffee, whether or not roasted or decaffeinated; coffee husks and skins; coffee
substitutes containing coffee in any proportion (duty in % of value):
− Coffee, not roasted:
0901 11 00 − − Not decaffeinated  . . . Free —
0901 12 00 − − Decaffeinated . . . . . . 8,3 —
− Coffee, roasted:
0901 21 00 − − Not decaffeinated. . . . 7,5 —
0901 22 00 − − Decaffeinated . ........ 9

Cocoa:

1801 00 00 Cocoa beans, whole or broken, raw or roasted . .  . . Free —
1802 00 00 Cocoa shells, husks, skins and other cocoa waste . . Free —
1803 Cocoa paste, whether or not defatted:
1803 10 00 − Not defatted . . . . . . . . . . . . . . . . . . . . . . .. . 9,6 —
1803 20 00 − Wholly or partly defatted . . . . . . . . . . . . . . .. . 9,6 —
1804 00 00 Cocoa butter, fat and oil . . . . . . . . . . . . . . . .   . 7,7 —
1805 00 00 Cocoa powder, not containing added sugar or other sweetening matter . . . 8 —
1806 Chocolate and other food preparations containing cocoa:
1806 10 − Cocoa powder, containing added sugar or other sweetening matter:
1806 10 15 − − Containing no sucrose or containing less than 5 % by weight of sucrose (including invert sugar expressed as sucrose) or isoglucose expressed as sucrose  . . . . . . 8 —
1806 10 20 − − Containing 5 % or more but less than 65 % by weight of sucrose (including invert sugar
expressed as sucrose) or isoglucose expressed as sucrose . . . . 8 + 25,2 €/100 kg/net —
1806 10 30 − − Containing 65 % or more but less than 80 % by weight of sucrose (including invert sugar expressed as sucrose) or isoglucose expressed as sucrose 8 + 31,4 €/100 kg/net —
1806 10 90 − − Containing 80 % or more by weight of sucrose (including invert sugar expressed as
sucrose) or isoglucose expressed as sucrose . . . . . . . . . . 8 + 41,9 €/100 kg/net

And on and on, as the product becomes more refined, the duties rise.

The effect? Those poor countries that grow such products are free to send us the raw materials, the things we cannot grow ourselves. But see them try to add a little value eh? Climb up the production chain, be something more than happy darkies working on the plantations and what happens? They get hit with ever increasing tariffs.

This is not some happenstance, not some odd effect of doing something else, this is deliberate policy on the part of that bunch of female gonads who rule over us.

Absolute bastards (and yes, I’m aware I’ve just lost whatever reputation I may have had with TEBAF for subtlety) and a reason, if you actually needed another one, to march on Brussels with burning brands, prepared to bury the corpse at a crossroads with a stake through its rotten heart.

We pay for this in higher prices, the poor pay for this by dying and the only people who benefit are those who collect the taxes.

You did know that customs duties go direct to the Commission? That rates are set solely by them? That is is exclusively a Union competence? That these monies raised are the only ones they get without asking permission of the national governments?

This makes me so damned angry, as I hope it does you. Our nordic commissioners get to laze in a sauna on money raised by keeping the dancing piccaninies out in the fields instead of developing indoor work with no heavy lifting.

Bastards.

July 7, 2005 in European Union | Permalink

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Comments

Tim, you're ommitting a very important part of the tariff structure; the poor countries exemption scheme. The 50 poorest countries in the world, plus a few Caribbean and Pacific former colonies, can export more or less anything into the EU tariff free. As Alan Beattie notes in his blog on the FT, the reason that Ghana doesn't move up the value chain from cocoa to chocolate is not so much because of EU tariffs, but more because it's bloody hot in Ghana and the chocolate would tend to melt.

Posted by: dsquared | Jul 8, 2005 7:40:35 AM

Tim,

I agree with much you say on the disadvantages of these tariffs. But let me tackle you on a few points when you say

"You did know that customs duties go direct to the Commission? That rates are set solely by them? That is is exclusively a Union competence? That these monies raised are the only ones they get without asking permission of the national governments?"

1. The duties go to fund the Community budget. But a rise in duties does not increase spending. The budget has to balance. And spending is determined entirely independently (basically by heads of state at summits like that one a couple of weeks ago). If there were less customs duties then more would have to be raised via other sources (eg through the GNP resource)

2. Tariffs and the like are hardly set entirely by Commission volition. The whole structure of trade is managed closely by member states in the Article 133 committee, and in the end derives from primary legislation. The Commission does not move tariffs around on a whim, as such changes are politically sensitive.

3. Yes , trade is exclusively a community "competence". That's because the EU is a customs union, by virtue of the Treaties. But that does not mean that member states are completely in the hands of the Commission on trade issues. Hardly. It means that the Commission negotiates for the EU as a bloc in external talks. On the basis of an agreed mandate.

4. The monies raised are indeed raised automatically. But that matters not at all, as the cash can't be spent like some kind of slush fund. There is an annual spending budget, set inside a seven year spending framework with rigid spending caps. The customs duties finance part of the agreed level of spending. As above, the residual has to come from other sources.

5 dsquared is right to point out that the "everything but arms" initiative is an important qualifier to the tariff structure. A complex tariff structure is only meaningful in isolation if no-one is exempted.

None of this is an endorsement of any of the tariffs or the like. But I think you are barking up the wrong tree to make the link to the budget in this way. The impression you give is that the EU likes the tariffs as they raise cash. But in fact the contribution of tariffs to overall resources has fallen steadily over time. Moreover, there is plenty of dissatisafaction in Brussels and elsewhere with this as a method of raising resources. But member states are also reluctant to consider a radical restructuring of the revenue side of the budget (think UK - how would a dedicated "European tax" go down?) so tariffs remain as a rump on the reveneu side of the budget.

Posted by: rjw | Jul 8, 2005 10:58:27 AM

Just to add a factoid - customs duties financed about 12% of the EU budget in 2004 (about 12 - 13 billion €)

Posted by: rjw | Jul 8, 2005 11:13:47 AM

dsquared - Actually, Golden Tree chocolate is made in Ghana. This chocolate has won multiple Monde Selection awards: see http://www.tradezone.com/tradesites/erhizeetech.html

Wonder why you can't buy more of it in the EU?

Posted by: lewisinnyc | Jul 9, 2005 2:34:56 AM

www.tradezone.com/tradesites/erhizeetech.html

Posted by: lewisinnyc | Jul 9, 2005 2:36:04 AM

Lewis: well it's certainly not because of tariffs as Ghana falls under the EBA regime. I would hazard a guess that it's expensive.

Posted by: dsquared | Jul 10, 2005 12:50:28 AM

I just started studying the British Legal System and the more I look into it the more I realise that there is no justice that is unselfish and nonbiasd towards Europe soley. In fact the more I examine it the more I begin to think that a universal justice dosen't really exist within it. I guess the EU was only created to make Europe prosperous so it shouldn't be a suprise that it dosen't really care who it abuses outside of its self-confessed-superior clique so long as it can enhance Europe's economy.

Posted by: Chris | Dec 3, 2007 12:07:25 AM

The EU is a hell of a lot better than I thought it was.
Dsquared that's actually not true, Ghana is too wealthy to qualify as a LDC in the EBA-but recently they have agreed on a mutual free trade EPA pact with Europe. The issue is that the world has still not agreed to reductions on subsidies, which are the biggest problem when it comes to primary agriculture such as rice and chicken that so many of Ghana's people depend on (and actually under this new EPA are seriously under threat because they cannot compete with the imports of cheap chicken). Of course LDCs under the EBA get to keep their high tariffs-fair play to the EU, in a theoretical sense they've put the LDCs in a heightened position, though in practice they're about equal now because of the advantage Western economies have.
With the absence of Ghanaian protective tariffs, when it comes to chocolate and other manufactured goods, it's very arguable that cheap European imports under the EPA will severely hurt these industries.
Mutual free trade (in inverted commas) is good, it means Ghana will be able to compete in European markets which, let's face it, is where all the money is. It's also unfair and bad for growth to expect European businesses to have to accept cheat imports from Ghana without being able to export the best, cheapest products they can make back. That's free market capitalism. Subsidies, however, aren't really. They're propping up businesses and farmers that are essentially making products more expensive than their Ghanaian counterparts-you think the Ghanaian government has that kind of spending power?
Ghana needs space to make up the ground-that means initial investment, training, education, construction. For one thing Ghana has the problem of making chocolate and cocoa butter in hot conditions. Ghana now, having bought VALCO, has the potential to ignite a complete Aluminium industry-from mining to refinement-but with the energy cuts she requires investment to get it restarted.
Subsidies therefore have to be cut back to allow Ghana to get back on its feet-and the domestic conditions are now there-Ghana is stable and democratic.
I should add that I am fully for firstly quality controls. If our farmers have to raise their expenses to make sure that certain guidelines are met, then the Ghanaian ones should have to conform a least to some extent.
Secondly with the issue of food 'air miles' and climate change a reorientation of the world's economy should be discussed. That means subsidies for European goods that would otherwise need to be flown (rather than shipped) from South Africa-hopefully this should foster regional food economies. Goods like chocolate, sugar, manufactured goods etc.-these are the ones which Africa can make and can be transported without huge cost to the environment. Furthermore as Africa develops the regional economies can become stronger and less dependent on world markets. I'm speaking from incredibly limited economics here, it's just one idea.

Posted by: Simon | Mar 11, 2008 5:22:31 PM