Saturday, November 24, 2007

Rigged commerce or free trade?

"These new trade agreements, known as Economic Partnership Agreements, (EPAs), between ACP countries, on the one hand, and the EU on the other, will replace the current preferential trading arrangements. Under these preferential trading arrangements, ACP countries enjoy duty free access for some of their exports to the EU.

First, that EPAs would open up European markets to agricultural products from ACP countries in the same way that ACP countries would open their economies up to those trade items that the EU has a comparative advantage over ACP countries.

This was a necessary assumption since for more than the last 50 years, trade liberalisation in industrial products far out paced liberalisation in agriculture.

In other words, global trade was rigged in favour of industrial products and against agriculture. Industrialised economies like the EU benefited both from their comparative advantage in industrial products and for their agricultural produce - a feat that these countries achieved by highly protecting their agricultural sectors from low cost producers in developing countries."

The Economic Partnership Agreements I blogged about earlier now seen from an African perspective. Remember that Lebanon has signed these agreements with the EU and the EFTA (non-EU Europeen countries)

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