Robert Guest: Q: Who cares if Blair is right and Chirac is wrong? A: Africa

The argument between Britain and France over the EU rebate is far more than mere posturing. Its impact will reach far beyond Europe to the poorest countries of Africa
Click to follow
The Independent Online

It's a funny thing, the European Union. On the one hand, it is the most successful free-trade bloc since the British empire. As such, it has made hundreds of millions of people richer than they would otherwise have been. On the other hand, when it comes to agriculture, it is pointlessly, expensively and harmfully protectionist.

As most of the world is thinking about Africa and debt - to which I will return below - the hot debate in the run-up to Thursday's EU summit is Britain's £3bn rebate. Britain, unsurprisingly, wants to keep it. Other members would like British taxpayers to give them more money. Jacques Chirac, the President of France, called on Britain to make a "gesture of solidarity for Europe" by re-negotiating the rebate.

Tony Blair pointed out that, even with the rebate, Britain's net contribution to the EU budget is two-and- a-half times bigger than France's. Without the rebate, it would be 15 times more. However, he said that Britain might be prepared to shift if there was a serious reform of the EU Common Agricultural Policy (CAP). Mr Chirac said no.

It is rare in politics for an issue to be so clear-cut. Mr Blair is right and Mr Chirac is wrong. It makes no sense for the British government to throw extra bales of money into the EU pot when so much of it is going to be shredded and fed to French pigs. Some 40 per cent of the EU budget is spent on farm subsidies. This money is utterly wasted, but that is only part of the scandal.

One small group benefits from the EU's agricultural policies: European farmers. The EU coddles them in two ways: by giving them money, and by erecting trade barriers to keep out cheaper food from outside the EU.

Three much larger groups lose out. European taxpayers get soaked for billions of euros so that inefficient French and Spanish farmers can breed more cows and churn out more cheese than anyone would voluntarily pay them to. Europeans are forced to pay more for their food than they would if cheap imports were allowed to flood on to supermarket shelves.

Finally, farmers outside the EU lose a valuable potential market. Since most of these farmers live in poor countries, this is a grave moral issue. Oxfam reckons that protectionism in rich countries costs the developing world $100bn (£60bn) a year. But none of these people can vote in Europe, as Mr Chirac is cynically aware.

It is not only the EU that is at fault. Most rich countries protect their farmers. Japan shields its rice farmers with tariffs of 600 per cent. America pays its own, mostly wealthy, cotton-growers to produce too much cotton, which depresses world prices and makes the wretched cotton farmers of Mali and Burkina Faso even poorer. New Zealand is about the only advanced nation that has seriously slashed farm subsidies and tariffs. By an amazing coincidence, food there is much cheaper than in the EU.

Not only is the CAP horribly expensive; it is also unfathomably complex. I once asked an academic who specialises in the subject to explain the sugar tariff regime to me, and he admitted that, off the top of his head, he couldn't. What hope, then, has a South African sugar-grower of finding their way through the system?

A lot of people are justifiably furious about this. As Sir Bob Geldof reminds us, acow is not worth more than an African. Sir Bob and the Make Poverty History campaign hope to rouse a million people to march on Gleneagles next month, to jostle the rich world's leaders at the G8 summit into doing something about it.

Most of Make Poverty History's demands are reasonable: as well as an end to Western agricultural protectionism, campaigners want more aid and debt relief for the poorest nations, particularly in Africa. These are good ideas, but the campaign's advocacy of "fair" rather than free trade is not. Make Poverty History's line is that poor countries should keep their trade barriers intact, so that they can nurture infant industries behind them, as Japan and South Korea did. They always cite these two examples; there are not many others. There is a strong correlation between openness to trade and both wealth and rapid economic growth. By and large, free-trading countries are richer. And, regardless of their starting point, they tend to grow faster.

Attributing the economic miracles in Japan and Korea to protectionism is a huge stretch. The two countries' stellar schools and savings rates were surely more important, not to mention governments that made growth their top, indeed sole, priority. Poor countries thinking of copying them should bear in mind the counter-examples of India and much of sub-Saharan Africa, which stagnated when they had towering trade barriers. India has boomed since it started to dismantle its barriers. Africa has made less effort to do so, and has continued to stagnate.

It is rarely remarked upon, but tariff walls between African countries are much higher than the ones between Africa and Europe. And the informal obstacles to trade are even more daunting. A Kenyan hawker told me how difficult it was just moving a barrowload of trainers from one side of Nairobi to the other. He had to do it after dark and by side roads, he said, because if a policeman saw him, he would confiscate his stock and demand a fat bribe to return it.

Such corruption is as debilitating as it is widespread in Africa. I once hitched a ride on a beer truck in Cameroon that was transporting Guinness from the commercial capital to a small town in the rain forest: a distance about the same as from London to Edinburgh. We were stopped 47 times at road blocks by bribe-hungry policemen.

Tony Blair's mission to save Africa will doubtless do some good. But even if he were to persuade the other G8 leaders to meet all his demands, it would not suddenly transform Africa's fortunes. More aid, if spent wisely - a big if - would help. Aid that pays for vaccines or peacekeepers, or that supports the better-governed African states, can save lives. But no country ever grew rich on charity, and most of the better-governed African states are already worryingly aid-dependent. Roughly half of the governments' budgets in countries such as Mozambique, Rwanda and Uganda are supplied by donors.

Scrapping the CAP and other forms of rich-world agricultural protectionism would be a great boon to humankind. But contrary to popular perception, the main beneficiaries would be farmers in middle-income countries, not the poorest of the poor. Peasants in Ethiopia, who are not allowed to own their land and who are taxed back into penury every time they accumulate a small surplus, cannot compete with their more sophisticated counterparts in Brazil, Thailand or South Africa.

In short, Making Poverty History will take a long time. And though we in the North can and should help, we should not imagine that we are the main actors. When Africa eventually prospers, it will be because Africans have solved their own problems.

Robert Guest was until last month Africa editor of 'The Economist'. His book 'The Shackled Continent: Africa's Past, Present and Future' comes out in paperback next month