Updated: Nov 18, 2020
The European Union, for all of its ostentatious buildings towering over the streets of Brussels like big bloody shelters for Federalists with nothing else to do, does offer a rather sinister external trade policy when it comes to coffee and cocoa. In this article, we’re looking at Africa, the place we see on the television with starving children crying in the middle of a field, whilst some narrator tells us what bastards we are for not ringing the Red Cross now.
In reality, Africa is a recovering nation, Nigeria has the most entrepreneurs in the world. We in Europe love this; we eat their fruit, smoke their tobacco and occasionally go over and shoot some pesky wildlife for them. The European Union doesn’t want coffee growers getting any big ideas though; they can grow it of course, but we want to make the big bucks.
Coffee contributes to a fifth of Ethiopia’s and Uganda’s exports, offering both jobs and sustenance to many Africans. However, there is a 7.5% tariff on roasted coffee, leading to a situation where 96% of all coffee imported into the European union is green, in other words, unroasted. The case is the same with cocoa; another key export to the African continent, the European Union places a 30% tariff on processed cocoa, and 60% on other products containing cocoa.
Now the reasoning for this becomes more obtuse when you factor in that green (non-roasted) coffee bean imports into the EU aren’t subject to tariffs at all. Why does such a situation exist? Why are coffee import tariffs only subject to unprocessed coffee beans?
In order to answer this, one must look to German Neumann Coffee Group, a company who are the largest green coffee processors in the world. “German” made a $3.1bn in total revenue in this industry, with African growers making a total of just $2.4bn. Why can Neumann coffee make so much without picking a single bean themselves?
The sinister answer is that the EU placed tariffs on green beans so these companies could process the coffee beans instead of African coffee growers. This shows that the EU has rigged the external tariff system to protect its own businesses. If you’re asking, “what’s wrong with that?” Then stop reading, trade protectionists don’t really see a problem here. Those of us who see trade as the great liberator of the people do not see this as a failure of the free market, but instead an opportunity to develop healthier trade links with third world countries.
In 2013, the EU granted tariff-free trade to impoverished West African countries. Ethiopia and Uganda aren’t in that group, mainly because they’re on the other side of Africa, but also because once we remove tariffs on them, Neumann will be dead in the water.
Whilst reading you can ask if this tariff really is that bad, it’s only 7.5% after all. But the point is that the EU is incentivising growers not to make more money and to fulfil the menial task of growing the beans, while the Europeans make the big dough.
Furthermore, it also represents a vital selfishness and misunderstanding, by the European Union, of global free trade. Free trade isn’t driven by selfishness; it is driven by mutually beneficial cooperation in a system where tariffs are history. While we have these tariffs, we starve those we aim to help.
I’m calling for direct and swift action towards our members of the European Parliament. These tariffs need to be removed so the growers can roast the beans themselves and not be punished for wanting to make more money. While the bureaucrats debate about Brexit and further European integration, we starve those in need of our trade.