- The Washington Times - Monday, August 7, 2006

British Conservatives have been undergoing a makeover. David Cameron, the newish leader of what was once known as the “nasty” party, wants Conservatives to be gentler, greener, and more “caring” than their Thatcherite predecessors. Most importantly, he wants the Conservatives back in power.

Much of the redesign is pure fluff and many wonder if, when Mr. Cameron is all done, the Conservatives will stand for anything at all. Among the irritating ideas embraced by the “Cameroons,” as the British press labels today’s Conservatives, is their commitment to Labor’s massive expansion of government spending, abandonment of tax cuts and embrace of Britain’s ailing public service monopolies. Still, the Cameroons have many talented people in their ranks. They also have the occasional good idea, such as, for example, Andrew Mitchell’s vision of a Pan-African Trading Area.

Mr. Mitchell is Britain’s shadow international development secretary. (The British have made such an ungodly mess out of their own welfare system that they have decided to export it to the rest of the world. It is called foreign aid, and the British have a whole government ministry with a lot of bureaucrats devoted to administering it.) Last week, he announced a new proposal to help reduce African poverty. The proposal went beyond the standard “more money and debt relief” approach that, despite its past failure, has for years dominated the British policy toward Africa. In contrast, Mr. Mitchell recognized that most of Africa’s problems are homegrown. Chief among them, he said, is African trade protectionism.

Free trade is one of the most potent mechanisms for wealth creation. While not sufficient for higher economic growth, because it needs to be underpinned, among other things, by the rule of law and protections of private property rights, free trade is necessary. No country has become prosperous in economic isolation — just look at the Soviet Union of yesteryear and North Korea today.

Africa, unfortunately, is the world’s least economically integrated continent. “While OECD [Organization of Economic Cooperation and Development] countries cut tariffs from an average of 23.7 percent to just 3.9 percent in the 20 years from 1983, Sub-Saharan Africa only cut its tariffs from 22.1 percent to 17.7 percent. And astonishingly, many African countries impose tariffs on the import of medicines, and even Tanzanian-made anti-malaria bed-nets. These are, effectively, killer tariffs,” Mr. Mitchell said.

Indeed, African countries impose some of their highest tariffs on goods from other African countries. To the extent goods move between African countries today, they do so thanks to “a spaghetti bowl of complex … [and] small regional agreements.” Therefore, Mr. Mitchell proposed, “we should support the creation of a single Pan-African Trading Area for all Sub-Saharan African nations … where Africans — from Senegal to Swaziland — are free to exchange their goods and services with one another without restriction.” Quite.

Such a Pan-African Trading Area, lets call it PATA, would increase Africa’s wealth and reduce the continent’s poverty. In fact, the World Bank has estimated African countries would gain about as much from African trade liberalization as from the opening of rich countries’ markets to African goods.

Mr. Mitchell’s speech was intelligent, but also courageous. It took on the political “consensus” in Britain and some of its powerful advocates, such as Bob Geldof, a minor rocker, and Oxfam, an influential nongovernmental organization. (So, not surprisingly, the left-wing press in Britain has completely ignored Mr. Mitchell’s speech.) African producers, the argument goes, are so hopeless they cannot possibly compete with foreigners. They should, therefore, keep their protection, while, at the same time, have the developed world’s markets opened up to them.

All forms of economic protectionism are economically stupid and developed countries should liberalize — unilaterally if need be. But, after decades of domestic protectionism and preferential treatment overseas, Africa’s share of the world’s exports has actually declined from 2 percent in 1980 to 0.9 percent in 1999. It is only a slight exaggeration to conclude that if that trend continues, African economies will soon export nothing at all. That is because protected domestic producers that are reliant on their captive domestic market to keep them afloat see no need to make their products better and cheaper.

It is questionable, of course, whether it is Britain’s business to fix Africa’s problems. Africa has legions of globetrotting bureaucrats with the ostensible role of making the lives of African poor less miserable. (The continent even has a Pan-African Parliament, which, alas, is yet to produce anything concrete.) Still, the British government seems determined to spend an inordinate amount of taxpayers’ money on African development.

The best use for such money would be to bring all the African leaders to London, lock them in a small room, deprive them of food and sleep and let them out only when they have signed a comprehensive free trade agreement.

Marian L. Tupy is assistant director of the Project on Global Economic Liberty at the Cato Institute.

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