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WHY THE GOVERNMENT SHOULD RETHINK THE GHANA-EU INTERIM ECONOMIC PARTNERSHIP AGREEMENT

 I. INTRODUCTION

On December, 13 2007 Ghana and the EU INITIALLED what they called a “stepping stone” Economic Partnership Agreement, which they expected to SIGN by 30th June, 2008. The deadline was not met in 2008, and the EU is now putting pressure for this to be done as soon as possible this year. Meantime the whole of ECOWAS and the EU are currently engaged in negotiations on a full comprehensive EPA which the parties hope to finish by June this year. Most people believe this expectation is not realistic. Thus the pressure by the EU on Ghana to SIGN AND RATIFY soon is immense.

However, all the analyses carried out by a range of sources – from civil society to trade professionals and academics – strongly converge on the view that the interim agreement is not in Ghana’s overall interests, and in some cases, the terms are even worse than similar agreements between the EU and other countries like Kenya which share Ghana’s economic development challenges.

The IEPA agreement commits Ghana to liberalise an overwhelming proportion of its imports from the EU despite a lack of clarity on some key issues such as the basis for deciding how and which sectors of the economy will perform under this situation and how even the stated objectives of the IEPAs can be met by Ghana.

 In addition, on the issues that remain to be negotiated at ECOWAS level, the agreement commits the Government to an approach which is biased towards the European Union. These are issues of negotiation which are still controversial, and which do not lie in the hands of Ghana alone, but with the entire West Africa region.  

Thus, signature of the agreement will commit Government to an overall trade and development policy which is negative to the overall interest of Ghana, both nationally and within the West African region.  

How did we arrive at the IEPAs? Negotiations between the European Union and different regional groupings in Africa (as well as the Caribbean and the Pacific) on Economic Partnership Agreements to replace the preferential trade regime under the Cotonou Agreement were meant to be concluded in December, 2007. As a result of severe differences between all the African regional groupings (ECOWAS, SADC, CEMAC, ESA) and the EU, the deadline could not be met so the parties agreed to extend the negotiations into 2008.

However, in order to ensure that the exports of African countries continued to enjoy the duty-free access to the European market that they had under the Cotonou Agreement, African countries requested that the EU apply for an extension of the WTO waiver. For ECOWAS, this decision was a collective regional position adopted at the highest levels of political leadership in the negotiations.  

Civil society organisations and individual experts put forward alternative proposals in case the EU found the waiver route unacceptable. For the developing country members of Africa (such as Ghana, Cote d’Ivoire and Nigeria), the groups recommended that the EU extend to the African countries a scheme that the EU had in place in for many other economies in Latin America, the so-called GSP+; and for the Least developed country members, a scheme which the EU has already bound itself to provide, the Everything But Arms (EBA) scheme.

The EU refused both options, and (contrary to the accepted understanding that EPAs were to be negotiated regionally) proceeded to negotiate Interim Economic Partnership Agreements (IEPAs) with individual countries. Of the three developing country members of West Africa, Ghana and Cote d’Ivoire negotiated these agreements; Nigeria refused.

II. LIBERALISATION OF TRADE IN GOODS

Elimination of Customs Duties [Article 13 of IEPA and annexes] –Too much, too quickly

With regards to trade in goods, the interim agreement commits Ghana to eliminate tariffs on 80% of goods imported from European Union. Bearing in mind that 40% of all Ghana’s world-wide imports comes from Europe; the implications of this level of liberalisation are staggering.

Many authoritative studies, including by the World Bank have concluded the highest level of liberalisation of trade with the EU that countries like Ghana can withstand without collapsing their...

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