Brussels, 02/08/2012 (Agence Europe) - A British think tank has criticised EU trade policy for its inconsistency of approach towards developing countries.
In a report, drafted by 20 of the world's leading experts and published on 26 July, the Overseas Development Institute (ODI) slams Europe's ever more protectionist stance, which it says hampers the global economy and the economies of the most vulnerable developing countries.
The reform of the EU's Generalised System of Preferences (GSP), the first in 30 years (a new system is due to begin on 1 January 2014), will see richer developing countries, such as India and Vietnam, lose trade concessions of up to €257 million, the experts writing in the ODI report argue. They say the reform, which is claimed to be to the benefit of the poorest developing countries, will most benefit richer nations, such as Switzerland and the USA, while EU consumers lose out. At the same time, developing countries, such as Kenya, Ghana, Botswana, Namibia and Swaziland, could lose €50 million in trade preferences each year, if they do not sign up to the EU's economic partnership agreements.
Apart from the fact that GSP reform will increase rather than reduce trade barriers, affecting a whole range of products and countries which have not concluded a reciprocal free trade agreement (FTA) with the EU, the ODI lambasts the EU trade policy “lacking vision and consistency” with regard to developing countries, in its attempts to differentiate between them. “There is a clear danger that 'differentiation' in the area of trade will be applied without consideration of economic principles”, warns the think tank, noting that trade theory suggests that lower tariffs (including those applied to emerging powers) are always better, and that differentiation is a distraction.
The ODI also attacks the common agricultural policy (CAP) which it views as paying out “economically inefficient and environmentally harmful subsidies to a selected group of European farmers”.
The ODI also reproaches the EU on its overly defensive position on the role of trade in tackling global challenges like climate change and food security, even threatening to impose trade barriers for green purposes. “In fact, the opposite needs to occur: free trade can help countries to reap the benefits of economies of scale in green industries and can provide access to water, land, energy and hence food”, it argues. (EH/transl.rt)