Much ado about very little?
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CTA. 2001. Much ado about very little?. Spore 93. CTA, Wageningen, The Netherlands.
Permanent link to this item: http://hdl.handle.net/10568/46184
Internet URL: http://spore.cta.int/images/stories/pdf/old/spore93.pdf
Trade, especially the international variety, rarely brings out the best in people. Competition can be savage and when economic survival is at stake, slashing prices will work better than even the most creative advertising. It s an ugly...
Trade, especially the international variety, rarely brings out the best in people. Competition can be savage and when economic survival is at stake, slashing prices will work better than even the most creative advertising. It s an ugly rough-and-tumble and one of the not-pretty sights is the loss of solidarity between nations. The European Union recently announced the removal of all import quotas and duties on products from the world s 48 Least-Developed Countries (most LDCs are ACP States). The measure went into effect on 9 March 2001, in an orgy of praise in Europe at least, but it seems to be far from world-shattering. Most LDCs already benefited from duty-free access on most goods, and preferential quotas on key produce such as bananas. In 1998, the total value of EU duties on goods from all LDCs amounted to a mere 7 million most of it on a handful of temperate agricultural products. These are principally maize, some cheese, beef, bananas, rice and sugar and sugar derivatives, and the current suppliers, mainly in ACP States, are none happy about competition from other LDCs, in the ACP Group or elsewhere. Whether those 7 million savings will lead to lower shop prices, more demand and eventually get back to the farmer-producer will depend on who runs the supply chain. Without a doubt, some products from some countries are now more competitive for the European market. But the not so simple minds will ask, as the World Trade Organisation is abolishing all import duties anyway, why all the fuss? Whatever. The real value of the decision is in its knock-on effects, the so-called dynamic impact . It is hoped that some LDC exports will be so energised by the new opportunities to sell on the EU market that they will produce and sell more, and spill over into the North American market which also recently lowered its tariffs for LDCs. Not, though, without some serious investment in some LDCs capacity to deliver: Madagascar s beef exporters, for example, now stand before an open door, with no herds available to sell. And not, though, before a cacophony of grumbles from pre-March 9 preferred suppliers, whether they be the ubiquitous banana growers, the sugar growers in small ACP island States or Europe, or ACP rice growers. The liberalisation of these three product groups is being taken more gently, aiming at free access by 2006, 2009 and 2009 respectively. But beyond the growls and the vicious back-biting even between ACP States, the real lesson is that in trade, you have to think ahead to get ahead. Now that was worth t 7 million of European taxpayers money; thanks, EU. [caption to illustration] Some markets are more equal than others