Under the proposal, Tackling the challenges in commodity markets and on raw materials, developing countries will face increased import tariffs when they sell raw materials to Europe if they ‘apply unjustified restrictions to raw materials’ as defined by the European Union.
In Kenya – where the government levies a 40% export duty on raw hides and skins in order to develop the leather processing industry – recent research indicates that Kenya’s export tax has helped create 7,000 new jobs, increased incomes for another 40,000 people and boosted earnings from the sector by over €8 million, with the potential for much more.
Despite these successes, the EU is still calling for restrictions on the use of export taxes in Kenya, as elsewhere. The leather sector in Kenya shows how a developing country can achieve benefits for its people by defying the EU’s ideological commitment to unfettered ‘free trade’.
Liz May of international development NGO Traidcraft says: “Depriving nations, like the countries in Africa, of the means to protect and develop their economies will only drive them further into poverty. It is critical that developing countries are able to use all necessary policy tools to add value to their raw materials.
“In its bid to get access to cheap raw materials, the EU is threatening to undermine the very basis for countries’ future development”.
Europe is the world’s biggest single market for natural resources, importing 23% of the world’s total, according to the WTO. And research commissioned by Traidcraft (note 3 below) shows that the average European consumes three times as many resources as the average Asian and more than four times as much as the average African.
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