It’s GSP Plus after December... after EU failed to push EPA’s through
The Statesman(Accra) - 29/10/2007
It’s GSP Plus after December... after EU failed to push EPA’s through
Suleiman Mustapha
Trade negotiations between the EU, and the African, Caribbean and Pacific group, have now entered a critical phase with the interested stakeholders agreeing that the Economic Partnership Agreement negotiations between the ACP and the EU will not be concluded within the time frame of December 2007.
This is because the Ministerial committee monitoring the negotiations of the EPA between West Africa and the European Union have requested a three-year extension of the 2007 deadline for the conclusion of negotiations for a free trade area of the two economic blocs.
The extension comes in the wake of pressure by civil society and the media including The Statesman urging caution on their Governments not to rush through with the endorsement of the pact with the European Union.
West Africa wants the EPA to come into force on 1st January 2011 instead of January 2008 provided under the Cotonou partnership agreement which lays the framework for the negotiation of the EPAs between the EU and the 77 African, Caribbean and Pacific countries.
The one-day extraordinary meeting of the Ministerial Monitoring Committee for the EPA, comprising regional Ministers for Trade, Finance and ECOWAS Affairs, endorsed a proposal by an earlier meeting of experts for the extension "based on the volume of outstanding tasks, the completion of which determines the viability of the EPA."
Among them is the upgrading of the economies of Member States to improve their competitiveness, which requires the injection of funds from the EU.
In this regard, the Ministers urged the European party to ensure prompt disbursement of funds and coherence between development aid granted to ACP countries under the negotiations and those granted EU member states.
But what trading regime will apply after the expiration of the current trading system in December this year?, this has spurred intense controversy and suspicion between civil society organisations in Ghana and policy implementers and government negotiators and the European Union.
Various options have been tabled for trade to progress between the two trading blocs, which are WTO compatible, Among them are the continuation of the Cotonou regime so as to facilitate the completion of negotiations within reasonable deadline.
Others have also proposed a narrow phased EPA, which is the conclusion of a agreement on reciprocal access to the market for goods, in such a way as to comply WTO rules relative to the formation of a Free Trade Agreement.
But the most viable transitional regime proposed by the Civil groups in Ghana and elsewhere is the Generalized System pf Preferences Plus.
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 per cent 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.
"Admitting ACP countries into GSP-plus in 2007 would provide exporters and investors in these key export sectors the certainty they need to continue exports" he stressed.
This he said would take the excessive and undue time pressure off the EPA negotiations and enable ACP countries to continue negotiations beyond 2007 with zero or negligible interruption of current trade.
Mr Hormeku noted that ACP countries have a wide a wide range of options than the EU is suggesting "In the event that the ACP nations are not ready to sign by the end of the year, the EU could still provide them with a high level of market access, under the GSP-plus scheme, without breaching the WTO rules," said Hormeku.
But the Multilateral, Regional and Bilateral Director at the Ministry of Trade, Industry and President’s Special Initiative L.Y Sae-Brawusi disagreed with the proposal saying that the GSP-plus is just a gift from the European Union, which could be taken anytime the European Commission feels like doing so.
Mr Sae-Brawusi is also among the country’s negotiators said the GSP-plus does not provide clarity for development purposes and so will be risky for the country to opt for the scheme.
Chairman of the Parliamentary Select Committee on Trade Nana Akomea proposed a dialogue with the trade experts and the Committee to address shortfalls in the country’s trade negotiations.
Mr Sae-Brawusi is also among the country’s negotiators said the GSP-plus does not provide clarity for development purposes and so will be risky for the country to opt for the scheme.
Chairman of the Parliamentary Select Committee on Trade Nana Akomea proposed a dialogue with the trade experts and the Committee to address shortfalls in the country’s trade negotiations.
The European Commission has threatened some of the world’s poorest countries with lower access to the EU market if they fail to sign the new free trade deals known as the Economic Partnership Agreement by the end of 2007, when their current market preferences expire.
EPAs have been widely criticised by civil society organisations on the grounds that it will distort developing countries trade initiatives, and be used as a damping ground for Europe’s cheap imports.
But the delegation of the European Union in Ghana, denies this, insisting that the key target of EPAs is to improve the business environment for African entrepreneurs by promoting regional integration and tackling supply-side constraints.
In a press statement copied to The Statesman, the delegation said, globalisation and especially highly competitive production in East Asia, are already threatening various sectors in Africa and elsewhere.
The statement said the EU was working with ACP countries to respond to this challenge.
"To use EPAs as a scapegoat for economic realities of today’s global market economy is missing the target.
"Under EPAs, we would help to define or consolidate a common customs tariff to protect the emerging regional markets, so that Ghana could have an advantage regionally. For Ghanaian exports to the EU to have free access, which generally exists already today, they will have be consolidated within an EPA," according to the statement.
Advocacy groups in the country have recommended to the country’s negotiating team in the new trade agreement with the European Union to 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.
Trade negotiations between the EU, and the African, Caribbean and Pacific group, have now entered a critical phase.
Six sub-regional groupings of the ACP have entered into Phase Two of the negotiations to agree on Economic Partnership Agreements with the EU. The outcome of the negotiations will be a series of new Free Trade Agreements, replacing the Lomé system of preferential access to the European market for the ACP from 2008.
While the Lomé regime was far from perfect, it did allow ACP countries the space to pursue pro-development policies.
Protection for local industries, and access to the European market was a successful formula for Mauritius and Botswana who saw their GDP per capita rise from less than $300 at independence to $10,000 by 2002.
The replacement of the Lomé regime, with free trade areas is a massive risk for the ACP, but the EU has nothing to lose. ACP countries, are unlikely to gain better access to the European market, but will see their local industries put under severe strain by competition from cheap European imports, often subsidised and of poor quality.
