EDITORIAL;EPA is not good for Ghana

Civil Society Organisations (CSOs) in the country have cautioned government to reject entirely the Economic Partnership Agreement (EPA) pushed by the European Union (EU).

They argued that signing of the agreement will permanently lock the country’s economy deeper into a primary commodity dependence trap and derail harmonisation of regional integration.

Ghana initialled a separate Interim Economic Partnership Agreement (IEPA) with the 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 of the preference regime for some Ghanaian and African, Caribbean and Pacific (ACP) exports in December 2007.

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.

Three of the CSOs, namely Abantu for Development, Ghana National Association of Poultry Farmers and Third World Network (TWN), emphasised that initialling the EPA as an additional trade regime will further fragment and eventually derail harmonisation of West Africa’s regional position and regional integration,

Mr. Gyekye Tanoh, Head of Economic Unit, Third World Network (TWN) said: “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.”

This Paper, at present, would like to caution government to be mindful of the fact that there are worrying signals regarding the development of the EPA in the international landscape.

Our position is informed by three basic issues that need to be considered in what decision we take.

Firstly, the EPA is essentially nothing more than the old Marshallian philosophy of divide and rule that the Europeans have used time and again to control the African continent, which they consider as their backyard and a source of supply of cheap raw materials.

Ghana’s economy, and for that matter the whole of the ECOWAS economies, has been one of a primary resource supplier to the European market. The EPA is basically a mechanism for propagating the status quo.

A decision to sign on to the EPA is therefore a decision to maintain the status quo; a decision against it is to kick against the status quo.

The second fact, closely linked to the first, is about the choice of diversifying and integrating economies of the sub-region so as to make them more competitive and stronger in an increasingly difficult global economy.

This fact is not lost on West Africa’s economic juggernaut, Nigeria, which curiously blocked the entry of some 77 Ghanaian non-traditional exports - which are most manufactures - to that country when Ghana signed the IEPA.

Ghana will now have to either pay the price of losing its European market for its primary commodities, or look to bear the cost of developing its more prospective markets in the sub-region and the continent as a whole for its value added products.

The pain of losing the European market, which in this Paper’s opinion is not entirely likely, is the short-term price to pay for the long-term gain of establishing a strong presence in the burgeoning sub-regional market for Ghanaian manufactured products.

The third point, and perhaps the most important, is that the global economy-dynamics have changed with new important capital and commodity markets emerging.

The BRICS countries are becoming important participants in Ghana’s economy, especially China which also has become an important source of financing for basic infrastructure development in the country.

If previously Ghana was entirely dependent upon its development partners for its development programmes, not so now. It is about time the country came into its own and made a strong statement about its readiness to take its destiny into its own hands.

Indeed, there are growing examples of how deeply problematic the EPAs are proving for developing countries and regions. The official position of the Conference of African Trade Ministers held in Kigali towards the end of last year highlighted several of these problems and threats.

The most recent ECOWAS-EU negotiation sessions in Brussels last June show how intractable these problems are. Yet the EU continues to push for more. In the June Brussels sessions, the EU tried to shoot down the Common External Tariff framework that ECOWAS is trying to develop and implement, with threats of WTO sanctions.

The EU further demanded more liberalisation of market access for its goods than the 70 percent ECOWAS is offering, which expert opinion considers as already too high and uncompetitive for West Africa. Ghana’s market opening to the EU in the IEPA is much higher, at 80.5 percent.

This is one of the reasons why ECOWAS rejected the Ghana IEPA as a template, and why the continued existence of the Ghana IEPA poses a huge problem for the country and the sub-region.

The EU also sought to extend free trade rules into new areas such as health and “intermediate inputs”, which includes access to strategic raw materials and natural resources. But at the same time, the EU refuses to meet the requirement to provide additional funding for the high costs on our economies of adjusting to the EPA.

Obviously, the desperation with which the EU is pushing the EPA lends credence to suspicions, especially from CSOs, that their intentions are more than supporting the economic development of the ACP countries. Now is the time to kick against the status quo. Period!