Civil society up in arms on EPA

Civil society organisations (CSOs) and private sector groups have increased pressure on government not to sign the ECOWAS-EU Economic Partnership Agreement (EPA), warning that the agreement will permanently lock the country’s economy deeper into a primary commodity- dependence trap and derail regional integration.

The organisations, comprising the Trades Union Congress, Ghana Chamber of Commerce and Industry, the Christian Council, Socialist Forum and the Economic Justice Network, presented a petition to President John Dramani Mahama in Accra ahead of a meeting of the ECOWAS Council of Ministers in Yamoussoukro, Côte d’Ivoire, from 25-26 March, 2014.

Negotiations at the technical level on the ECOWAS-EPA were concluded on January 24 in Dakar and the result will be submitted to the Yamoussoukro Council of Ministers meeting.

EU officials say the next step for the EPA is political ratification by ECOWAS heads of state and EU political leaders.

“We urge government not to adopt the ECOWAS-EPA, and we request that you instruct your Minister who will be representing Ghana at the forthcoming Yamoussoukro meeting of the Council of Ministers to act accordingly.

“Signing the agreement will be fundamentally worse than the country’s own Interim Economic Partnership Agreement (IEPA) that was initialled in 2007, which is inimical in the country’s own terms and which government has so far rightly refrained from signing,” Dr. Yao Graham, a representative from the Economic Justice Network, told the media in Accra.

According to him, the EPA will commit the country to start -- within six months of the agreement being adopted -- negotiations for an extensive agenda of deregulating a whole range of economic sectors such as services, investment, government procurement, intellectual property and areas that have never been part of the EPA negotiating agenda such as capital accounts.

He said none of these are required by any international rule or obligation undertaken by Ghana.

He said aside from all the negative provisions of the country’s IEPA -- with its implications such as revenue loss, attack on domestic industry and domestic value-addition, loss of policy space and constraints on South-South cooperation -- the new ECOWAS-EPA contains two fundamental threats to the economies of the country and the sub-region.

“Not only does it explicitly target the essence of the light manufacturing sector, the acknowledged catalyst for any transition of Ghana’s economy from a small-holder agrarian economy to an industrialised economy, the cumulative effect of this agreement will be to take away from government the very range of policy instruments that are needed to redress the multiple challenges the country faces at this critical time of economic life.”

Over-liberalisation

The ECOWAS-EPA involves an agreement to liberalise 75 percent of all imports of goods into West African countries from the European Union in exchange for complete liberalisation on the EU side. The EU had wanted 80 percent of ECOWAS, whose offer then was 70 percent.

According to the civil society campaigners, the new 75 percent threshold was achieved by explicitly targetting for liberalisation a series of locally manufactured products and related sectors.

These include paper rolls, paper cartons, textiles, insecticides, fungicides, disinfectants, corrugated roofing sheets, paving stones, blocks, tiles, roofing tiles, corks, lids, bottle tops, baby walkers, prams and similar things, towels, sanitary towels, nappies, and similar products, garments and accessories for garments, chemical waste, among others.

“All these can now be freely imported from Europe, ultimately with zero import tariff, if the ECOWAS-EPA is adopted. Liberalisation of these products does not follow any sound economic logic and, in fact, ECOWAS technical personnel and officials opposed the Trade Commissioner who imposed this,” said Dr. Graham.

“These are products made locally, which are not exported to Europe but to the domestic and regional markets.”

The campaigners pointed out that mastery of manufactured products and their technology help breed the know-how, industrial discipline, planning, market competence for the country and the region’s ability to move to heavy industry and other more complicated and technology-based manufacture.

“By exposing these to untrammelled competition from producers in the economically better-endowed European Union, the ECOWAS-EPA will not only kill today’s enterprises, it will also kill the domestic platform for industrial transition,” they said.

Deregulation of capital accounts

The group again noted that the deregulation of capital accounts is an even more extreme example of the EU’s aggressive agenda toward West Africa’s economies, with negative effects for the region.
They said this issue has never been part of the negotiating agenda, but the EU is taking advantage of the pressures of the situation to impose this.

“Just as it did when it used the deadlines in 2007 to impose the effective prohibition of export taxes in the IEPA -- hence depriving us of a policy instrument that all governments have applied to encourage domestic processing of and value-addition to raw produce -- by deregulating capital accounts, the EU seeks to facilitate for its investors and financial dealers the free flow of capital in and out of our economy. Ultimately, this would take away the very instruments used by the Bank of Ghana to manage our recent foreign exchange crisis.”

The campaigners said the EU agenda on government procurement, capital accounts, services and investment is even more unacceptable as the EU demands that negotiations on these issues must be started within six months of the adoption of the ECOWAS-EPA, with a complete road map identifying which issues and what treatment are to be adopted.

They argued that West African countries do not have national and/or common regional policies to negotiate on the subject, nor have they carried out any comprehensive, meaningful national assessments involving stakeholders to build strategic policies.

“Civil society organisations, the private sector, and many respectable bodies including the United Nations have demonstrated conclusively that there are credible alternatives to signing the EPAs, including Ghana’s own Interim EPA,” said Edward Kareweh, Deputy General Secretary of the General Agricultural Workers’ Union of TUC.

“At the very least, the savings in revenue that our countries can make by not signing the EPAs are, on conservative calculations, about three times the cost to the three or so groups of exporters who will be affected; and some of this saving can be used to support these exporters in the time that it will take us all to work and help them diversify their export markets,” he added.