“Ghana must, however, consider traditional measures to guarantee market access seeing as a regional partnership agreement would not have been ratified before the deadline of 14th October of this year”- President Mahama, 2014 State of the Nation Address in Parliament.
The recent economic hardships in Ghana have turned much attention to strengthening and diversifying the export sector as the primary and focal means to build a resilient economy. This makes the impact of the European Partnership Agreement (EPA) between the EU and Ghana and/or the entire ECOWAS region exceptionally pivotal.
The EU represents Ghana’s largest trading partner, with an average of 40% of our Non–Traditional Exports (NTEs) ending up in Europe. Presently, the NTE export climate is being helmed by the Interim European Partnership Agreement (IEPA) which was initialed in 2007. In the ECOWAS region, an EPA was initiated to replace the Cotonou Agreements. However, technicalities have held up the signing of the EPA to date.
The IEPA was exceptionally necessary for Ghana in the interim because unlike the other countries in the sub region, there was no viable provisional trade agreement to fill the gap. Of the 15 countries in the West African bloc, 12 countries considered Least Developed Countries (LDCs) were guaranteed full tariff free, quota free access to EU market under the Everything but Arms (EBA) program. Of the remaining three, Nigeria was secured by its major export commodity being exempt from tariffs and Ivory Coast has already indicated that it would ratify the IEPA.
The IEPA stipulates that 75% of imports from the EU would be duty free in exchange for 100% EU market access for Ghana (except rice and sugar).
The slicing of EU tariffs is to be executed over 15 years, with the first 5 years seeing no change in tariffs. The 25% of imports from the EU that would incur tariffs is to protect the agricultural produce and products currently manufactured in Ghana.
Initial feedback after signing the IEPA has been positive from the exporters of non-traditional products. These groups of industries endorse the passage of the ECOWAS EPA which was to have taken place in March 2014 at a meeting of the ECOWAS Heads of State. It however has been postponed to May 2014 in order to rectify technicalities in the contract.
Response and perception of the EPAs, especially from civil society organizations has been overwhelmingly negative. The main critiques being that, it causes a loss of revenue to government in import tariffs from the EU, and it will ruin the local industries that will be unable to compete with the influx of cheaper products from the EU.