Tom. This is very important. You are not the first, and will probably not be the last to mistakenly repeat this claim, based on a fundamental error made in this article.
Calestous Juma failed to interpret the tariff schedule correctly and missed a rather important point.
Calestous Juma failed to interpret the tariff schedule correctly and missed a rather important point.
Professor Juma links to this document to show the 7.5% tariff for roasted coffee. ico.org/documents/icc-… … in this table on page 3.
But, and it is a big but, he either failed to notice, or for some reason ignored the other row headings in the table. MFN, GSP, LDC.
But, and it is a big but, he either failed to notice, or for some reason ignored the other row headings in the table. MFN, GSP, LDC.
What do they mean?
MFN is Most Favoured Nation, meaning the rate under WTO MFN rules, applied to all countries where there's no WTO approved exemption.
Exemptions are by Free Trade Agreement or by WTO approved derogation. The latter are what GSP and LDC refer to.
MFN is Most Favoured Nation, meaning the rate under WTO MFN rules, applied to all countries where there's no WTO approved exemption.
Exemptions are by Free Trade Agreement or by WTO approved derogation. The latter are what GSP and LDC refer to.
On page 5 of the document used by Professor Juma you will find the following paragraph that explains the exemptions.
This means that the row headed LDC should be used countries identified by the UN as least developed countries. So a ZERO tariff, not 7.5%MFN tariff should apply.
This means that the row headed LDC should be used countries identified by the UN as least developed countries. So a ZERO tariff, not 7.5%MFN tariff should apply.
The least developed countries, are defined by the UN. Currently 47 countries, as shown in blue on this map. They all benefit from unconditional zero tariffs on everything exported to the EU, except for guns and ammunition, under the EU's Everything But Arms programme.
Furthermore, under the EU's Generalised System of Preferences(GSP) scheme many other countries benefit from tariffs reduced by 1/2 to 1/3 the MFN tariff.
Under GSP+ countries encouraged to maintain sustainable development and good government are also rewarded with zero tariffs.
Under GSP+ countries encouraged to maintain sustainable development and good government are also rewarded with zero tariffs.
In addition to these unilateral preferential tariff schemes. The EU has a number of EPA(FTA) agreements with most of the other countries in Africa, which nullify tariffs.
A consequence of tariff reduction/elimination is a commercial advantage over countries on the MFN tariff.
A consequence of tariff reduction/elimination is a commercial advantage over countries on the MFN tariff.
So with regards the roasted coffee claim in Professor Juma's article, how does this play our in reality? Well the following table shows the world's top 51 coffee exporting countries and the tariff on roasted coffee exported to the EU. African countries are highlighted in blue.
You will note that of the 22 African countries listed here. 20 are on zero tariffs. One is on a preferential GSP tariff and only one, Gabon, is on the full tariff.
Are you surprised by this? Are you surprised that Brexiters don't seem to be aware of this?
Are you surprised by this? Are you surprised that Brexiters don't seem to be aware of this?
I hope you will acknowledge that you were in error quoting the article, recognise the issue, and will no longer use this entirely bogus argument to support your position on the EU.
Though I have to say, if you do so, you'll be the first Brexiter I've explained this to who does.
Though I have to say, if you do so, you'll be the first Brexiter I've explained this to who does.
I forgot to add this map which shows the EU's trade arrangements with African countries.
Note, as of today CapX have modified the article noting Professor Juma ignoring EBA and GSP. and FTAs. Will this put an end to people using it to support their bogus argument?
