The New Resource Grab: How EU Trade Policy is Undermining Development

Report for Traidcraft (UK), Oxfam-Germany, Comlamh (Ireland), WEED (Germany) and AITEC (France) (November 2010)

The European Union is making a big push to help its companies access raw materials in developing countries. The EU’s Raw Materials Initiative heralds a new scramble for raw materials such as platinum, rare earths, wood, chemicals and hides and skins. The trade policies accompanying the initiative are likely to impoverish poor countries. In particular, the EU is trying to curb developing countries restricting the exports of these raw materials. Yet many developing countries apply export taxes on their raw materials exports to develop their local industry, raise revenue or protect the environment. The EU is also trying to negotiate new investment rules with poor countries to give European companies unprecedented access to raw materials on the same or even better terms as local businesses. This EU push will make it more difficult for developing countries to regulate investment to promote local development.

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