When Germany’s Development Minister Müller visited Côte d’Ivoire in March 2017, he was astounded: ‘It can’t be right that cocoa and coffee growers cannot live off their hard work, and that instead of going to school, children have to slave on the plantations,’ he railed. The country is the world’s largest cocoa producer, and European chocolate manufacturers are among the main purchasers. Yet a cocoa farmer earns only about 50 cents per day. To help the country progress, the minister urged for more local processing. The EU, for its part, should help by dismantling trade barriers. Müller calls fair trade between the continents ‘a modern policy for Africa’s future’.[1]

Since colonial times, trade ties between Europe and Africa have depended on African small farmers planting tea, coffee, cotton, cocoa or vanilla – commodities consumed by Europeans, not Africans. Africans earn more by exporting these goods. These small farmers use only a small fraction of their fields for subsistence. They plant foodstuffs high in calories and protein but low in vitamins: beans, cassava or plantains. This food is usually just enough to feed a family, but not really healthy. If the weather goes crazy, as during the 2016-17 drought in East Africa, the yield will be too poor to feed their kids a decent lunch.

Since the 1970s, African countries have exported these commodities duty-free to the EU,[2] including coffee, the continent’s second major global export after crude oil. Small farmers from West to East Africa have been planting coffee bushes for centuries – European colonial powers once forced them to. The Africans export the green coffee duty-free to EU companies, who then roast, package and sell it. If African coffee cooperatives were to invest in their own roasting plants to create jobs and obtain a higher selling price, the EU would charge import duties on the refined product. Therefore, shipping pure green coffee is cheaper for trading companies.

This has absurd consequences: Until just a few years ago, Rwandan restaurants would serve anyone ordering coffee a packet of Nescafé powder from Swiss producer Nestlé and hot water in a thermos jug, while coffee beans grow on bushes just outside. With increasing urbanization and globalization, the African middle class has developed a taste for coffee. In the cities, coffeehouses are opening for the middle classes to meet for cappuccino. However, the drink costs more in Rwanda than at Starbucks in downtown Berlin[3] – even though the world’s largest coffeehouse chain gets some of its coffee from Rwanda, whose beans now rank among the best in the world.

The second-largest Ugandan coffee producer, Good African Coffee, which supplies Ugandan coffee houses, drove this absurdity to extremes: For years, it shipped green coffee duty-free from Uganda over 3,700 miles to Ireland to be roasted and ground in Dublin – and then shipped back to Uganda vacuum-packed. A pound of roasted ground coffee costs less than 3 euros. In 2009, Good African Coffee opened its own roasting plant in Uganda. The price for this coffee far surpassed that of green coffee,[4] but this also raised the price for European coffee drinkers.

Latte lovers in Africa usually have to make do with powdered milk produced by the Dutch-British food giant Unilever. African supermarkets sell this item many times cheaper than fresh milk – although in many African countries, cows outnumber people. However, massive subsidizing of agricultural subsidies in the EU generates huge food surpluses through factory farming, high-yield breeding and feed supplements. In recent years, these surpluses have caused milk prices to hit rock bottom. The same has happened to meat production, for example chicken; and also, to wheat for baguettes and sandwich bread, which has long since displaced traditional millet varieties in Africa.

For this reason, the 2015 export strategy by German Agricultural Minister Christian Schmidt plans to process European cows’ milk into powder in Europe and export it cheaply to Africa. In countries like Burkina Faso or Nigeria, for example, where cows traditionally belong to extended families, supermarket refrigerators offer the choice between yogurts from French food corporation Danone made with powdered milk from the EU, or a yogurt from the milk cooperative around the corner. The EU yogurt is cheaper, although its ingredients were produced over 3,000 miles away.[5]

Those who claim that more European corporations in Africa could create more jobs there fail to recognize that they are causing African small farmers to lose their livelihoods. Large European dairy corporations like Arla, FrieslandCampina and Danone recently invested in West African companies or formed joint ventures. They get rid of their milk powder by turning it into yogurt in Africa.

NGOs like Germanwatch, Brot für die Welt and Misereor warned back in 2015 that Schmidt’s export offensive could lead to significant ‘market disruptions’ in developing countries. Milk and whey powder make up 60 percent of EU dairy exports, and Africa is the most important market.[6] ‘Especially in West African countries, cheap imports prevent domestic dairy farmers from gaining access to the growing urban markets in their own country,’ says Kerstin Lanje of Misereor. ‘We fear that in the near future, more EU imports will worsen the economic situation of herder families, who make up about a third of the population.’

Africa risks becoming a ‘clearance section for EU exports’, says Francisco Marí of Brot für die Welt. ‘Skimmed milk powder enriched with vegetable fat and aimed at the lowest market segment is seen as the EU’s new best-selling export to Africa. In the last 10 years the EU has more than doubled its exports there.’[7]

The 2014 study Honest Accounts? The True Story of Africa’s Billion Dollar Losses, conducted by 14 international NGOs, calculated: Sub-Saharan Africa receives $134 billion a year from the West in development funding, investments and loans – while $192 billion flow out of Africa. Of this figure, major corporations take $46 billion as profit. Another $35 billion vanish into tax havens, mostly invested in mailbox companies by corrupt state employees. The assumption that the West is helping Africa has created a ‘perverse reality in which the UK and other wealthy states celebrate their generosity whilst simultaneously assisting their companies to drain Africa’s resources’, the researchers write.[8]

EU-Africa free trade: the art of the foul deal

In his Marshall Plan for Africa, German Development Minister Müller speaks of ‘fair trade’: that is, free trade agreements on a fair basis, so cocoa and coffee growers can soon earn sufficient incomes. He is referring to current negotiations on Economic Partnership Agreements (EPAs) between the EU, individual African states, and blocs such as the East African Community (EAC), the Economic Community of West African States (ECOWAS) and the South African Development Community (SADC), which are highly controversial in Africa.

For almost 20 years, the EU has been insisting that African markets open up to EU imports and eliminate their protective tariffs. The Europeans argued that opening their markets unilaterally, that is, maintaining the duty-free regime for African products entering the EU but not vice versa, would be incompatible with the rules of the World Trade Organization (WTO). Hence, back in 2000 in Benin’s capital Cotonou, the negotiating partners decided to set up EPAs. The resulting plan accounted for African concerns and included a developmental policy component on paper: The Africans were to open their markets to 80 percent of the EU’s products gradually over the next 15 years, while 20 percent would be protected from EU competition. Negotiations began in 2002.

At the same time, the EU guaranteed continued duty-free access to Africa’s 49 low-income countries through its Everything But Arms initiative [9] which came into force in 2001. Hence, the EU’s potential punitive tariffs would affect only the continent’s ‘middle-income countries’: Kenya, Botswana, Ghana, Cameroon, Namibia, South Africa and Côte d’Ivoire. Protests erupted over the initiative: in Kenya, demonstrators took to the streets in Nairobi during the 2007 World Social Forum, an alternative event to the WTO summits;[10] in Ghana the labor unions protested in 2008.[11] The partners have since extended negotiation deadlines several times.

In 2014 the EU put the gun to Kenya’s head and imposed import duties on Kenyan products for three months. Kenyan farmers who grow cut flowers for the European market threatened their government in 2016, saying they would emigrate to Ethiopia or Tanzania if the 6 percent punitive tariff remained in place. Thousands of jobs were at risk, which raised pressure on Kenya’s government to finally accept the deal. In September 2016, Kenya and Rwanda signed the EPA.[12] Rwanda is about to ratify it. Günter Nooke, the German Chancellor’s G8 Personal Representative for Africa, said about Kenya, ‘No, the way we handled it in the EU Commission, there was no choice. We left them no other option to keep their access to Europe.’[13]

Since then, the EAC has been deeply divided: Burundi vehemently refuses to join talks with the Europeans.[14] After the post-election political crisis in Burundi in 2015, the EU stopped development cooperation with the country and imposed sanctions against the new regime. As a result, Burundi has no interest in accommodating the EU. Tanzania is resisting as well. A parliamentary declaration cites the disadvantages of liberalization for Tanzania’s industry and development.[15] While the country planned to push ahead with industrialization, domestic products would not withstand European competition, which would threaten jobs and investments, the declaration states.[16]

At the 2016 annual conference in the Kenyan capital Nairobi, Patrick Gomes, Secretary General of the African, Caribbean and Pacific Group of States (ACP), warned of heavy-handed threats from Brussels: Countries should recognize that ‘EPA comes not only with trade options with Europe’, urged Gomes. Those who did not sign the agreements ‘could end up losing important development aid from the EU’.[17]

For a long time, it seemed that the EAC would fall apart over the issue of EPAs. After all, the EAC is a free trade zone, like the Schengen Area. If EPAs allowed Europeans to import products duty-free to Kenya, what would prevent those goods from reaching Uganda or Rwanda? EAC countries would have to restore their customs borders.

A study commissioned by the EAC and conducted by the United Nations Economic Commission for Africa (UNECA) found that East Africans would be the biggest losers in the EPAs. Kenya, a relatively developed country, would suffer the greatest damage and lose about $45 million annually in customs, while the EU, the clear winner, would gain $212 million.[18] ‘Local industries will struggle to withstand competitive pressures from EU firms, while the region will be stuck in its position as a low value-added commodity exporter,’ the study found.[19] Further, East Africans fear for their good trade ties with India and China, from where they import far more, if they were to grant Europe duty-free import for competing goods.

In late May 2017, the EAC heads of state met for their annual summit in Tanzania’s largest city, Dar es Salaam. They had long postponed this top-tier meeting because their negotiators could not agree on the EPAs. For days, the leaders conferred behind closed doors. Uganda’s President Museveni delivered the closing statement. The region’s oldest president proudly announced their new consensus: no country would sign the outstanding EPAs until the EU could dispel the concerns of Burundi and Tanzania. He added that the EU should negotiate a trade deal with the EAC, not with individual states, and that the EAC had charged him with clarifying these points with Brussels.[20] At this summit, the East Africans dared to stand up together to the European economic superpower.

West Africa was a different story. The region with its economic community ECOWAS is the EU’s major trading partner in Africa – so an agreement is all the more important.[21] In July 2014, the EU completed its negotiations with the West African states and ECOWAS, and in December 2015 they signed the EPAs. The individual countries were to ratify them as soon as possible. Yet it emerged that Nigeria, Africa’s largest economic power and biggest oil producer, would refuse – and thereby prevent the ECOWAS partners from ratifying the EPAs as a bloc. At last, ECOWAS managed to levy a 35 percent import duty on all ‘sensitive’ food products such as beef, chicken, yogurt, eggs, cocoa powder, chocolate, tomato paste and print fabrics to protect domestic products.[22]

However, the EU found loopholes. Threatening punitive tariffs, it pressured the developed states Ghana and Côte d’Ivoire, who make up the lion’s share of trade with Europe, to accept the bilateral EPAs. They are the two largest global cocoa exporters. Both states closed interim agreements with the EU that have regulated their trade since 2016. Since then, they have been accessing the EU market free of customs and quotas. In return, the EU requires them to open their markets to 80 percent of EU imports within 15 years.[23]

However, these individual agreements specify different tariffs than the ECOWAS agreement. For example, ECOWAS levies an external tariff of 35 percent on European chicken, while Ghana and Côte d’Ivoire levy only 20 percent. Although Ghana can initially protect its local milk production with a higher tariff of 20 percent – the ECOWAS common external tariff (CET) allows only 10 percent – it has to eliminate this tariff altogether by 2022.[24] As a likely result, European export companies will ship their goods to West Africa via the ports of the capitals Accra and Abidjan, and from there across the duty-free internal borders of ECOWAS to other countries.

‘And so after 14 years of negotiations, the EU’s trade policy is leaving behind a wreck in West Africa,’ comments the German NGO Brot für die Welt.[25] Its advisor for global nutrition, agricultural trading and ocean policy, Francisco Marí, concludes in his December 2016 blog entry on the EPA deal with Ghana: ‘People in Africa are aware that the soapbox speeches by EU politicians, such as Federal Chancellor Merkel’s on her recent Africa trip, are only lip service. It is time to throw poverty-producing partnership agreements between the EU and Africa into the dustbin of history and see them as they are: a failed attempt to carry on the neo-colonial relationship with the neighboring continent. This is not what partnership looks like.’[26]

  1. Bild (2017)‘Entwicklungsminister Müller wirbt für fairen Handel mit Afrika’, 1 March | http://bit.ly/2tWrrCG
  2. In 1963 the states of the European Economic Community (EEC) met with 17 African states in Cameroon's capital for the so-called First Yaoundé Convention. They signed an agreement by which the least developed countries of Africa could import raw materials duty-free into the Schengen area. In 1969 the ‘Second Yaoundé Convention‘ renewed this agreement.
  3. Schlindwein, Simone (2016) ‘Not my cup of coffee’, Fluter, 9 September | http://bit.ly/2cySRSV
  4. Uganda Radio Network (2009) ‘Uganda’s First Local Coffee Processing Plant Opens’, Kampala, 17 July | http://bit.ly/2x6EvmM
  5. Der Irrsinn mit der Milch. ZDF television documentary film, 25 January 2017 | http://bit.ly/2vaQ3aN
  6. Reichert, T. and Leimbach, J. (2015) Billiges Milchpulver für die Welt – Das Auslaufen der EU-Milchquote und die Milcherzeugung und -exporte in Deutschland und der EU, October 2015 | https://bit.ly/2N7R221
  7. Sarmadi, Dario (2015) ‘NGOs: Deutsche Milchexport-Offensive bedroht Entwicklungsländer’, Euractiv, 14 October | http://bit.ly/2uMDNfE
  8. Honest Accounts? The true story of Africa’s billion dollar losses, Curtis Research Report, p.7. July 2014 | https://bit.ly/2V0EuvV
  9. EU Commission (2013) ‘Everything But Arms (EBA) – Who benefits’, Strategy paper of the EU Commission, Brussels, 30 April 2013 | http://bit.ly/2tQtJ2d | http://www.trade.ec.europa.eu/doclib/docs/2013/april/tradoc_150983.pdf (This document has since been removed from this website)
  10. Africa Renewal (2007) ‘Africans fear “ruin” in Europe trade talks’, July 2007 | http://bit.ly/2ubqOAq
  11. BBC (2008) ‘EPA protests in Ghana’, 30 September | http://bbc.in/2uMIBSd
  12. The East African (2016) ‘Kenya, Rwanda sign East Africa trade deal with Europe’, 1 September | http://bit.ly/2ct243j
  13. Deutsche Welle (2017) ‘EU-Freihandel mit Afrika: Unfairer Deal?’, 11 January | http://bit.ly/2hfWvHK
  14. The East African (2016) ‘Burundi says will not sign EPAs; Dar mulls decision as Uganda backs Kenya, Rwanda’, 4 September | http://bit.ly/2cncOfR
  15. ‘Tanzanian parliament advises government not to sign EPA with EU’, International Centre for Trade and sustainable Development, 17 November 2016 | http://bit.ly/2hfIp9l
  16. Mwambe, Geoffrey (2014) Analysis of the Economic Partnership Agreement between the East African Community and the European Union: A Gravity Model Approach, Macroeconomic and Financial Management Institute for Eastern and Southern Africa (MEFMI), December 2014 | https://bit.ly/2BFK2oj
  17. The Citizen (2016) ‘Report: EAC members risk losing Europe aid over EPA’, 25 December | http://bit.ly/2vkFYsa
  18. The East African (2017) ‘EPA: To sign or not to sign? That is the question for EAC partners’, 21 May | http://bit.ly/2uPGziy
  19. ibid.
  20. The East African (2017) ‘EAC-Europe trade deal signing put on hold’, 27 May | http://bit.ly/2uMDr8R
  21. EU Commission (2017) ‘Economic Partnership Agreement with West Africa – Facts and figures’, 29 November | https://bit.ly/2SkxckZ
  22. Ibid.
  23. Official Journal of the European Union (2016) Internationale Partnership Agreement with Côte d'Ivoire, Brussels, 7 October |  https://bit.ly/2T0X9uW -The specifics can be found following the source document  (1)ABl. L 287 vom 21.10.2016, S. 1. –CJ
  24. Official Journal of the European Union (2016) Internationale Partnership Agreement with Ghana, Brussels, 15 December | http://bit.ly/2uMe8DG
  25. European Union (2016) How can the EPA help Ghana’s sustainable development?’, June 2016 | https://bit.ly/2g5dibd
  26. Marí, Francisco (2016) ‘EPA-Handelsabkommen EU-Ghana ratifiziert!’, Blog entry by NGO expert in world nutrition, agricultural trade and ocean policy, Brot für die Welt, 5 December | http://bit.ly/2uZOQDG


Dictators as Gatekeepers for Europe Copyright © 2019 by Christoph Links Verlag GmbH. All Rights Reserved.

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