‘Abandon interim EPA’

Signing of the Economic Partnership Agreement (EPA) will permanently lock the country’s economy deeper into a primary commodity-dependence trap and derail harmonisation of regional integration, civil society organisations have cautioned.

Ghana initialled a separate Interim EPA with the European Union (EU) four years ago, ostensibly to end uncertainty and protect a very small group of exporters who depend almost exclusively on the EU market -- as their products would have attracted additional tariffs upon expiration, in December 2007, of the preference regime for some Ghanaian and Africa, Caribbean and Pacific (ACP) exports.

The IEPA is explained as a temporary measure meant to alleviate specific issues of countries such as Cote d’Ivoire, Nigeria and Ghana, pending harmonisation and completion at the ECOWAS level.

“The interim EPA is onerous and indeed inimical to the country’s development and to the region, yet government is threatening to make it a permanent agreement.

“The IEPA, as an additional trade regime, will further fragment and eventually derail harmonisation of West Africa’s regional position and integration,” Mr. Gyekye Tanoh, Head of Economic Unit, Third World Network (TWN), said at a media forum in Accra.

The forum comes ahead of the Economic Community of West African States (ECOWAS) Ministerial Monitoring Committee (MMC) meeting on EPAs scheduled for Accra next month. The MMC is the highest EPA authority for ECOWAS and its member-states.

The IEPA grants the country export margins into the EU market including full duty-free access, with the country earning approximately €240 million annually from such exports.
Among export commodities eligible under the EPA agreement are pineapples, frozen foods and canned tuna.

According to Mr. Tanoh, the country’s continuous use of an IEPA is a threat to repositioning of the national economy and to regional integration in the ECOWAS bloc.

“The EPAs will not promote industrialisation and structural transformation of African economies, but will lock the economy deeper into a primary commodity-dependence trap.”

Mr. Tanoh proposed that government should explain how the EPAs will help rather than hinder its new industrial policy and the country’s industrialisation imperatives. It must also explain how its own IEPA will help the harmonisation of ECOWAS integration.

“We therefore urge government to reject the IEPAs and join the ECOWAS harmonisation and integration process as the country’s current approach has introduced confusion in these regional EPA processes.

“Ghana’s current stance further threatens to introduce multiple trade regimes in West Africa, a very dangerous step.

“Ghana’s position is also holding to ransom the country’s economy and the much larger Ghanaian exporting community that is less dependent on the European Union (EU) market.

“The IEPA remains a Trojan horse as it will make it easier for the overall EPA process to override as well as block progress towards West Africa’s regional efforts to develop coherent common tariff regimes that provide sufficient developmental space.”

He explained that the EU’s demands and pressure in areas that go beyond tariffs and World Trade Organisation (WTO) commitments – such as financial services, public procurement, investment, health, raw Materials and natural resources - pose even greater threats and are of more strategic importance to Africa’s economic transformation, industrialisation and overall development.

“Our contention is that the IEPA must be abandoned. It is a threat to the repositioning of the national economy and to regional integration in ECOWAS. We urge the government to do so at the MMC meeting it will host in September.

“We also call on the government to expeditiously clear up this damaging uncertainty whose most tangible manifestation is the treacherous existence of the country’s IEPA alongside the regional ECOWAS EPA position and process.”

Dr. David Pessey, Consultant, Ghana National Association of Poultry Farmers, pointed out that signing the IEPAs would add to the woes of the country and deepen unemployment.

He remarked that the rampant importation of chicken from Europe has led to the collapse of the local poultry industry, adding that the cost of imported poultry products is relatively cheaper because foreign farmers receive heavy subsidies from their governments and get loans at cheaper rates, thereby making it difficult for locals to compete.

Rose Mensah-Kutin, Executive Director, Abantu for Development, indicated that there are growing examples of how deeply problematic the EPAs are proving for developing countries and regions.

“The EU sought to extend free-trade rules into new areas such as health and intermediate inputs, which include access to strategic raw materials and natural resources. But it refuses to meet the requirement to provide additional funding for the high cost of adjusting to the EPA in our economies,” she argued.