It is too easy to dismiss the antiglobalization demonstrators who will gather in Cancun to protest against free trade as wrongheaded and lacking in even the most basic understanding of economics. It is too easy because it is true; free trade is the only workable route out of poverty for the developing world, and by marching against free trade the protesters are, in effect, demanding that the poor remain poor.

But, if only they had the wit to realize it, there is a target at the very heart of the WTO’s establishment that is fully deserving of the protesters’ scorn, and which indeed acts to keep the developing world in poverty. That target is the EU.

The European Union talks a good game of free trade. By your actions, however, shall you be judged. And the EU is responsible for operating a system of protection so harmful to the interests of the developing world that it leads, directly, to the death of the poorest of the poor.

Four main countries or trading blocs--the EU, the U.S., Japan and Canada--account for 75% of world output. They are the obvious destinations for exports from the developing world. Yet while the four blocs talk endlessly about the liberalization of world trade, they have been ruthless in keeping their domestic markets closed to agricultural and textile exports from the poorest countries. The worst of these rich protectionists, by far, is the EU.

The EU runs two sets of protectionist policies that could have been designed expressly to wreck the trading chances of those poorest countries that have comparative advantages in food and textiles.

First, there are the trade restrictions. Though the EU has a low industrial tariff of 5%, its agricultural tariffs average 20%, rising to a peak of 250% on certain products. On textiles, there are strict quotas on most important lines. These have been reduced or removed in the case of unimportant products such as parachutes and umbrellas. But the European market remains barely open to the majority of low cost textiles from the developing world.

Added to explicit trade barriers are the complex rules of origin applied to imports from the developing world. These stipulate how much of a product must be made from local inputs to qualify for the preferential tariffs. Only a third of imports from those developing countries eligible for preferential access are able to meet the strict criteria. And even if an exporter is able to comply, there are then the further regulations on health and safety. These are directly protectionist.

For example, one regulation requires that milk should be taken from cows by machinery and not by hand. This effectively shuts out all Indian milk products (which, even without this regulation, would still face tariffs of between 76% and 144%). Rules on aflotoxins cost sub-Saharan Africa $1.3 billion every year in lost exports of cereals, dried fruits and nuts.

These rules reduce trade between the EU and the developing world. They also filter out exports of value-added products from the developing world. In February 2002, for example, Tony Blair visited a cocoa farm in Ghana, a collective enterprise set up by the Comic Relief charity. The cocoa is good and has a ready market in Europe--which has no cocoa sector of its own and so does not penalize imports. The cocoa is used to manufacture a brand of chocolate bar called Dubbles. These are not, however, manufactured locally but in Germany. The reason: tariffs would raise the price of Dubbles by a 10 pence a bar (around a quarter of the existing price) if manufactured outside the European Union.

The second great barrier is the agricultural subsidy handed out by the EU under the rules of the infamous Common Agricultural Policy. The CAP affects the developing world in three ways. First, it completes the effect of tariffs and other barriers in shutting them out of a market in which they would otherwise have a comparative advantage. The EU, for example, spends EUROS2.7 billion each year on subsidizing European farmers to grow sugar beet, while it maintains high tariff barriers against sugar imports from the developing world.

Second, it generates immense surpluses of foodstuffs that cannot be sold within the EU at the prevailing intervention prices. Much of these surpluses are exported at very low prices that undercut those charged by the unsubsidized producers of the developing world. A prime case of this is sugar sales in the Middle East. Countries like Sudan are crowded out of the sugar market in Egypt and Saudi Arabia.

Third, some of the surpluses are exported at subsidised prices to developing countries, thereby crowding out domestic producers. In Jamaica, some 3,000 dairy farmers are being driven out of business by imported milk powder from the EU. Some 5,500 metric tons are sent there each year at a cost to the European taxpayers of $3 million.

These are not dry figures. They represent human suffering. Around the globe, 24,000 people die every day from causes directly related to malnutrition which is a result of poverty. A reasonable assumption, erring on the side of caution, is that 20,000 of these people do not die from purely local causes such as civil war and crop failure.

In a world of potential abundance that could be made actual by more open trading rules, the European Union accounts, in widely accepted estimates, for a third of trade protection. Given the earlier assumption, 6,600 people can thus be said to die every day in the developing world because of the trading rules of the EU. That is 275 people every hour of the day. In other words, one person dies every 13 seconds somewhere in the world--mainly in Africa--because the European Union does not act on trade as it talks.

That figure is, of course, open to question. Other estimates are possible. Even if it is one death every 30 seconds or 10 minutes it doesn’t really matter, because whatever the true figure, one thing is unquestionable: the developing world would be transformed given access to markets in the rich world, access which the EU has deliberately denied. That is the real outrage that should cause protests in Cancun.
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