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and protectionism” Russel Robert makes a case for free markets and against protectionism. The author counters the concerns by arguing that dumping is very unlikely to happen due to it being impractical. The “dumper” would incur losses and the targeted economy would benefit from cheaper products. The bottom-line appeal is to trust in free trade.

6 EU Uganda

Nevertheless the investigative report ”The Right to Food of Milk and Maize Farmers” published in 2008 by the “FIAN INTERNATIONAL” - organization raises doubt about that point of view. [7]

In Uganda 100 000 liters of regionally produced milk are thrown away every day while 50% of the market demand is covered by imports. [8] The foreign milk comes mainly from the European Union and is traded as part of the Economic Partnership Agreement (EPA) between the EU and Uganda.

The European product is of superior quality and at the same time the cheapest on Uganda’s market.

But why is the milk from Europe so cheap? The answer lies in the numerous subsidising programs the European farmers are able to “benefit” from. The European Comission of Agriculture and Rural Developement is encouraging a production surplus through direct payments. [9] Then the European excess milk is receiving an additional export subsidy and is shipped off to nations like Uganda.

One could assume that since Uganda’s consumers are free to benefit from the low prices the overall effect for the economy and the world trade as a whole is positive. However several facts are contradictory to this view.

It stands to reason that Uganda’s local milk-farmers suffer under the foreign competition and many of them are shutting down since they are unable to match the low prices. Since the income of 80% percent of all Ugandans depends on agriculture the negative impact on Uganda’s economy is overshadowing the great deal its consumers are making on milk. [10] Uganda’s only option for supporting its local economy would be to also subsidise their farmers, but this seems impossible, since Uganda is busy enough financing its military and infrastructure. [11]

An evident paradox in the situation is the European Union giving development aid (11,7% of Uganda’s GNP) to Uganda, while driving its agricultural producers out of business . [12] The EU justifies its subsidies through the importance of food supply independence and higher quality standarts in an area under EU regulations. However, effects on the local labour market are also likely to have a role in this decision, which influences developing countries in a quite negative way.

It may well be, that a blind opening of the domestic market to free trade has negative consequences for a countries developement.

7 How free is “free” trade

Freedom of trade is a questionable assumption.

The United States, Japan, Taiwan and South Korea chose to protect their domestic industries rather than completely open their economies to global trade. By having a closer look at South Korea, we see that growing rice was the comparative advantage in the past. But instead of primarily focusing on it (as suggested by Smith/ Ricardo), the improvement of its steel industry became the main premise for avoiding a dependence on others. Countries like Japan or Germany have been experts in this métier for decades and Korea would need years to become