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TRADE: ECOWAS Delay on EPA Allows Ghana to Re-Think

Francis Kokutse

ACCRA, Jun 29 2009 (IPS) - There are conflicting signals about whether west African countries will sign an economic partnership agreement (EPA) with the European Union, as the original deadline of Jun 30 has been postponed and stakeholders hold different views on the new deadline of end Oct. This may still allow Ghana to re-think its interim EPA.

At a Jun 22 meeting of the leaders of the Economic Community of West African States (ECOWAS) in Abuja, Nigeria, a new deadline for the signing of the EPA was set for the end of Oct this year. But Cheikh Tidiane Dieye, a Senegalese trade activist, believes this new date is also likely to be missed.

Dieye told journalists at a workshop last week in Senegal that he was sure that negotiations would probably continue until Jan 2010 since both the European Union (EU) and ECOWAS have not agreed on the market percentages to be liberalised.

He said the contending issues between ECOWAS and EU was that west Africa is proposing 60 percent liberalisation of its markets while the EU wants 80 percent. ‘‘There are still a lot of issues to deal with. I do not see ECOWAS signing the EPA in October,’’ he stressed, according to the Ghana News Agency.

Amadou Niang, Senegal’s minister of commerce, called for a ‘‘social’’ approach to the EPA negotiations and that the talks should involve civil society, since the decisions taken in the agreement would have political, social and economic effects on people.

The extension of the ECOWAS-EU talks on the EPA has given Ghana, which has signed an interim EPA with the EU, an opportunity to reconsider. The government can now think through what some civil society groups claim is not in the national interest.

The agreement is a problem for the new government which had won an election and come to power after the interim EPA was signed.

The EU took to negotiate individual interim EPAs with Ghana and Cote d’Ivoire after resistance from the rest of the west African region.

Emmanuel Awuri, acting director of policy planning, evaluation and monitoring in the ministry of trade, told IPS in the capital of Accra that, ‘‘the government of Ghana can therefore hold on to ECOWAS’s decision’’ while a decision is taken.

Awuri indicated that another option has opened up to Ghana under the present circumstances ‘‘to appeal to the EU’’ to give the government that inherited the agreement time to study it before deciding whether to accept it.

While the government think through what to do, civil society organisations led by Third World Network Africa (TWN Africa) insist that, ‘‘the interim agreement was at variance with the manifesto of the current government in power and therefore there is the need for a review of (the EPA).’’

Tetteh Hormeku, TWN Africa’s head of programmes, told IPS, ‘‘our understanding is that the agreement was just initialled and therefore did not have any legal binding until it was signed. Based on this, we drew the attention of the new government to take a closer look at the document.’’ TWN Africa is the Ghana-based secretariat of TWN, an international non-governmental organisation doing research and promoting equitable distribution of world resources and ecologically sustainable development.

The EU has given directives to its customs department to allow countries that had initialled the interim agreement to import duty free and quota free. According to Awuri, this is a partial implementation of the terms under the agreement by the EU.

But scrapping import duties on goods from the EU ‘‘ will substantially reduce the revenue that the government earns, resulting potentially in budget deficits and affecting resource allocation to social sectors such as education and health,’’ Hormeku stated.

Awuri retorted that ‘‘there are other areas where the EU is to assist countries that signed the agreement. It is therefore not an all-lose affair.’’

But Hormeku disagreed: ‘‘The elimination of high duties will lead to the collapse of domestic infant industries which compete with cheap and heavily subsidised imports from the EU.

‘‘Many authoritative studies, including those of the World Bank, concluded that a high level of liberalisation of trade with the EU made countries like Ghana stand the chance of destroying 60 percent of their local production.’’

Another area of the interim agreement that Hormeku finds damaging is the issue of the removal of export duties on scrap metal to the EU. Presently, there is an export tax to discourage the export of scrap in order to make it available to local manufacturers to produce simple farm implements for the poor in agriculture.

Already, there has been a sudden growth in the export of scrap metal to the disadvantage of local small-scale producers.

The TWN has also expressed misgivings on the rule of origin article in the interim EPA under which access to the EU market is only guaranteed if goods originate in Ghana.

Hormeku says, ‘‘a Ghanaian tuna producer cannot use fish from Togo that has been canned in Ghana for the EU market. This could create a difficulty not only for current production but for future economic development, especially for industrialisation prospects in cases where Ghana sources products for processing from its neighbours.’’

Finally, Awuri acknowledged that, ‘‘from a technical point, the government could go ahead with the signing of the interim agreement. However, there are political undercurrents, meaning that the government has to weigh different considerations in order to take a decision.’’