A free trade area for Africa, to help the impoverished continent match the spectacular growth of Far East economies, emerged as a distinctive British initiative at the G20 summit today.
The anti-poverty strategy, which is partly the brainchild of former Labour minister turned G20 adviser Baroness Vadera, has been developed with Jacob Zuma, the president of South Africa.
David Cameron, speaking at a business summit in Seoul today, said: \”We should explain that free trade is good for the poorest parts of our world as well, and one thing the British have been very active in trying to insert into this G20 is a free-trade area for Africa.
\”Africa should be a growing part of the world economy: we should be lifting more people out of poverty in Africa. But we will not do it with all the trade barriers that exist between African countries.\”
Despite the fact that both political sides seem to support it, usually proof that a proposal is horribly, wildly, stupid.
For it isn\’t true that \”free trade\” between the industrial nations and the developing is the only good thing about free trade. There\’s hugely, vastly, more benefit to come from intra African trade. For trade between those at roughly the same level of development still allows that division of labour and its specialisation, which is the very definition of the Smithian creation of wealth.
There\’s a passage in Michela Wrong\’s (very good by the way) \”In the Footsteps of Mr. Kurtz\” that describes the licences, allowances and taxes (plus of course huge bribes demanded and the arbitrage done by those, the disabled, who are tax free) that choke trade across the Congo River between Congo Brazaville and DRC. Wiping away all of those would, as with the EU (about which I know I complain but free trade is still free trade: the complaint is that the EU only allows intra EU free trade, not quite getting the point that if intra is good, so is inter) quite simply boost growth and wealth creation.