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Kyerematen: Tie development support to trade accord

The Statesman, Ghana

Kyerematen: Tie development support to trade accord

By Suleiman Mustapha

22 June 2007

Trade and Industry Minister Alan Kyerematen has said that all commitment of development support by the European Union to the African, Caribbean and Pacific countries be drafted into the ongoing free trade agreements between the two regional blocs.

Mr Kyerematen told journalists in Accra that "commitments made by way of support for development to ensure that the Economic Partnership Agreements become development tools should be written into the Agreements and enforced to ensure their fulfillment."

Answering questions from journalists on the potential threats of the free trade agreements to the industries of West Africa, the Minister said "even when you sign to the EPAs you still can protect certain sectors of your economy."

"There is no credible alternative that will be equivalent to the current trade regime in the Cotonou Agreement and at the same time WTO compatible," he said, adding that "it will still lack what will enhance the ACP states competitive supply capacity and leave them in the same situation in which they have been for over 30 years, The EPA’s with their promise of development, are, therefore, worth trying."

The current phase of negotiations is supposed to end in time for signature by December 31 this year so the implementation of the agreement could start in January 2008.

"Time is running out, and when I talk of time running out, it is only within the context of the roadmap that has been set for the negotiations," said Minister Kyerematen.

The E PA is a free trade accord that allows African, Caribbean and Pacific states and the European Union to open up their markets to goods and services between each other.

Mr Kyerematen acknowledged that the worry of some West African states, causing them to delay the agreement is due to the potential loss of revenue from duties, which constitute a major source of income for development.

"The argument that has been advanced by the ACP countries that they are not ready to sign the EPA in a sense is valid because if you look at the concept of an EPA it suggests that EU is not negotiating with individual countries, it is negotiating with regional

blocks within the ACP family. If you are negotiating with the regional blocks, then the regional blocks will be a negotiating entity," he said.

Mr Kyerematen said the EPAs have become necessary because the current regime of non-reciprocal preferential market access, which allows ACP states to export products to the EU market and a selective preferential access to the ACP market by the EU has failed to achieve the expected goal of assisting ACP countries to increase exports.

Some civil society organisations in Africa have criticised the EPA negotiation, which they say is a threat to the survival of industries in the ACP region.

On the WTO negotiations, Ghana has made some concessions of 1.3% of all its industrial tariffs, at ceiling levels of between 30 and 40%, which means that Ghana undertook a legally binding commitment not to increase those tariffs beyond the bound levels.

But advocacy groups in the country have recommended that the country"s negotiating team in the new trade agreement with the European Union opt for a more liberal trade pact known as the Generalised System of Preferences plus-scheme.

The group, which is made up of Third World Network and Oxfam, Ghana, has at various forums called for the rejection of the current trade talks, which will result in the implementation of the Economic Partnership Agreement between the European Union and the African, Caribbean, and Pacific Countries.

Head of Programmes at the Third World Network Africa Tetteh Hormeku who presented an Oxfam and TWN Africa report on the findings and recommendations of the effects of the Economic Partnership Agreement on the livelihood of Africans said the degree of market opening under EPA could have significant negative impact on rural livelihoods, current and future industries, and government revenue.

In an interaction with the Parliamentary Select Committee on Trade and officials of the Ministry of Trade, Industry and President’s Special Initiatives and the media, Mr Hormeku argued that under the GSP+ the EU could readily provide ACP countries including Ghana good market access for exports into 2008 at levels very similar to access under the Cotonou Agreement, in ways that are compatible with World Trade Organisation rules.

The GSP+ or ’Special Incentive Arrangement for Sustainable Development and Good Governance’ scheme provides preferential access that is substantially higher than GSP for countries implementing certain international standards in human and labour rights, environmental protection, the fight against drugs, and good governance. Currently, 15 developing countries, mainly in Latin America, are granted preferential access to the EU under this scheme.

At the moment, exports from ACP countries into the EU are governed by the Cotonou Preferences and by separate Commodity Protocols for sugar, bananas, beef and veal, and rum. GSP+ would provide a high level of coverage for ACP exports that currently utilise Cotonou Preferences. In 88 percent of the cases where the standard-GSP applies higher tariffs than Cotonou, duty-free access is provided under the GSP+.

All ACP export that would face a tariff jump of 20 percent or more in its ad valorem duty under the standard-GSP would receive duty-free treatment under GSP+. In the majority of cases where GSP-plus is not duty free, it offers the same level of access as Cotonou.

The study analysed the coverage of GSP-plus in detail for all the developing countries in the Eastern and Southern Africa and Economic Community of West African States negotiating blocs as well as Papua New Guinea - the largest economy in the Pacific region - the largest economy in the Pacific region.

Most significantly, the key export sectors of horticulture, fisheries, and wood, which are the sectors of greatest concern to many ACP countries, would have duty-free access into the EU market under GSP-plus.

But Alan Kyerematen says that option is illusory; it just doesn’t work out.

Courtesy of PIWA and CORDAID