Regardless of outcome of negotiations, there will be EPA-related costs
14 June 2014
According to press reports, the Ghanaian business community is divided over whether Ghana should ratify the EPA. Exporters to the EU (e.g. tuna and fruit processors) favour signing, while manufacturers targeting national and sub-regional markets oppose the agreement. At a meeting in April to discuss the EPA, a number of company representatives said that their industries would collapse if an EPA were not concluded, since their operations were “generally dependent on the EU market”.
Despite these views, the Association of Ghana Industries (AGI) has spoken out against the EPA agreement “after heated disagreements”.
Speaking on a current affairs programme, Ghana’s Minister of Trade and Industry has acknowledged that there will be costs whether an EPA is signed or not. Mr Haruna Iddrisu maintained that losing duty-free access to the EU market could result in “dire consequences”, since 49% of exports would be affected. The Minister argued that “the fear of losing the EU market” and associated investment “makes it compelling to have an arrangement of a sort”. Nevertheless, signing an agreement would “challenge Ghana to build its competitiveness, increase the capacity of local industries and increase [exports in order] to take advantage of the opportunity”.
The debate in Ghana on the EPA is becoming party political, with the Convention People's Party (CPP), an opposition party, maintaining that signing the EPA could cost Ghana “between US$1.12 billion and US$5.23 billion over a 14-year period” and could put “43, 000 local jobs on the line”. The CPP has warned that as result of the EPA, the government “will lose the option of using tariffs and price mechanism as means of protecting… local industries and addressing… balance of payment deficits”. The CPP says that the EPA also risks “weakening regional integration”.
However, some ministers in the Ghanaian government have expressed the belief that what is needed at the regional level is a stronger commitment on the part of ECOWAS governments to the implementation of the ECOWAS Trade Liberalisation Scheme (ETLS), and they consider that an EPA would help in this regard.
In neighbouring Nigeria, civil society bodies are also concerned about the revenue, employment and investment implications of an EPA. According to press reports, Professor Ademola Oyejide, Vice Chairman of the National Focal Point Committee, and Mr Ken Ukaoha, President of the National Association of Nigerian Traders (NANTS), both maintained that the private sector was “completely opposed to signing the agreement in its current form”. Mr Ukaoha commented that “Nigeria does not need to shiver over deadlines set by the EU, as there have been several deadlines set in the past.”
Editorial comment
Since Nigeria does not benefit from the transitional EU market access regulation (MAR1528/2007), which will lapse on 1 October 2014, Nigeria will indeed not be affected by the lapsing of the measure after that date. The lapsing of the measure does, however, mean that Nigerian exporters of a number of agri-food export products will continue to face EU import duties.
Equally, West African least developed countries (LDCs) will not be affected, since they benefit from duty-free, quota-free access under the EU’s ‘Everything But Arms’ initiative.
However, Ghana and Côte d’Ivoire, both non-LDCs, have been benefiting from MAR1528/2007 and, in the absence of an alternative agreement from 1 October 2014, would face the imposition of import duties on a range of agri-food sector products. This would severely undermine the competitiveness of their banana exports, and also affect emerging horticultural and processed cocoa product exports.
In contrast, if a regional EPA agreement were concluded, the Nigerian government would need to rethink its current use of a range of trade policy tools (such as conditional import licences, import bans and high supplementary levies). But a rethink is already required as a result of the commitments into which the Nigerian government has entered as part of the ECOWAS common external tariff (CET) process. Debates in the Nigerian press suggest that such a rethink of the current use of these tools may already be under way (see Agritrade article ‘ Uncertain movement on Nigeria’s rice trade policy’, 18 May 2014 and ‘ Nigeria to abandon cassava blending policy?’, 23 May 2014).
In Ghana, a regional EPA agreement could also place constraints on the potential use of agricultural trade policy tools in the context of the setting up of a Ghanaian International Trade Commission aimed at enhancing government trade policy (see Agritrade article ‘ Ghana looking to establish an International Trade Commission’, 24 April 2014).
