logo logo

West Africa: Ghana, Cote d’Ivoire would be hardest hit under EPAs

Public Agenda (Accra) | 17 December 2007

West Africa: Ghana, Cote d’Ivoire Would Be Hardest Hit Under EPAs

Ebenezer Hanson

The debate on the Economic Partnership Agreements (EPAs) is not going away as it surfaced in Parliament last Friday with the Member of Parliament (MP) for Kumawu, Hon. Yaw Baah, making some startling revelations on the impact it would have on West African countries particularly Ghana and Cote d’Ivoire.

According to him, under the EPAs, Ghana, Nigeria and Cote d’Ivoire considered as the three non-Least Developed Countries (LDC) among the ECOWAS countries would not enjoy preferential treatment status granted to other ECOWAS countries and risk losing out under the new trade arrangement.

He thinks that Nigeria now predominantly an oil economy would escape the imminent danger that would befall the largely agro-based products of Ghana and Cote d’Ivoire.

" It is the economies of the three that will be badly hit. Nigeria’s economy is no longer agro-based since it is more than 95% petroleum based. In the circumstance it is quite clear that it is Ghana, Cote d’Ivoire and to a little extent, Cape Verde, which are at the greatest risk," he submits.

Last Thursday after intense protests and controversy over the trade partnership agreement between the European Union and Africa Caribbean and Pacific countries, Ghana government decided to sign what is referred to as an interim Economic Partnership Agreement (EPA)-light with the European Commission.

The trade deal, which made Ghana the second after Cote d’Ivoire, would immediately eliminate tariffs on virtually all of the country’s exports to Europe and on 80% of imports from Europe over 15 years.

According to Hon. Joe Baidoe-Ansah, Minister for Trade and Industry, Private Sector Development and PSI, Ghana and Cote d’Ivoire-the world’s top two cocoa exporters- had taken the move to avoid disruptions to their exports after preferential trade terms expires at the end of 2007.

Ghana’s horticultural exporters have recently urged their government to sign the EPA-light in order to avert the possibility of losing out in business from January 1, 2008 - a situation that compelled civil society groups and other trade sector bodies to push the Kufuor government to subscribe to the Generalised Preference System (GPS).

The EPA-light is a partial arrangement that will ensure that exports of certain sensitive products to the EU markets are protected from higher tariffs while negotiations on the original text of the EPA continue.

It is a compromise proposal from the EU to commit ACP countries to continuous trade relations. The current preferential agreement known as the Cotonou agreement expires by the end of 2007, but the EU is not at ease with the ECOWAS demands. It will not renew Cotonou agreement.

The MP says against the backdrop of recent developments where Cote d’Ivoire and some Eastern and Southern African countries have signed interim agreements it was tenable that Ghana also initialed the interim agreement, especially considering the fact that "Nigeria unilaterally, without recourse to ECOWAS wants to access the SPG regime. This makes Ghana’s position quite precarious."

The trade regime of non-reciprocal preferences granted by the EU to the African, Caribbean and Pacific countries (ACP) for the past 25 years under the Lome Convention will end by December 31, 2007. In its place will be the EPAs which will be compatible with the World Trade Organization (WTO) rules of removal of trade barriers and strengthening co-operation in all trade related areas.

The ACP has been enjoying this waiver since the formation of WTO in 1995 under special arrangement negotiated. It was in pursuit of this action that the EPAs were first conceived about five years ago.

ACP’s percentage of world trade dropped from 6.7% in 1975 to 2.5% in 2000. By 2006 there had been further down sliding such that by end of that year the percentage had plummeted to a mere 2.2%.

Hon. Baah stresses "It was important that the EU to acknowledge that development is at the core of the Cotonou Agreement and EPA, and should not be artificially de-linked from trade issues by being negotiated at different stages." He insists, " Specific commitments are required by the EC particularly in respect EPA support measures and programmes, additional funding earmarked for adjustment costs and their various sources of fund."

The MP for Akim Abuakwa North, Hon. Joseph Boakye Danquah Adu, was of the view that if Ghana had not signed the EPA-light the country’s non-traditional exports would have suffered adversely after December 31, 2007 since there would have disruptions in exports.

He disclosed that under the EPA Ghana is expected to liberalise 80% of its market over a 15-year period. "Liberalisation is in phases and Ghana can maximize profits from that." He added his voice to the call by Hon. Baah that the EU should support West Africa industries through the EU Fund.

The MP for Wa West, Hon. Joseph Yieleh Chireh, called on the Minister for Trade and Industry to come and brief the House about the EPA as to its contents and what will be cost of signing it.

He observed that in Ghana, consultations on the EPA has not been extensive and key players involved are even divided as to the stance government should adopt.

"Exporters do not know what will be the fate of their products and the Association of Ghana Industries (AGI) are also apprehensive about their products at home," he said.

He called on the government to be vigilant regarding the EPA-light in that "although the EU claims that it will open its market from January 1, 2008 it will insist on quality and standards and this where we will have problems as a nation".