Ghana cannot sign EPA alone - Trade expert
Ghana cannot sign the Economic Partnership Agreement (EPA) with the European Union (EU) alone unless it goes together with the rest of ECOWAS member states, a trade expert told the Graphic Business on condition of anonymity.
This is because ECOWAS has a standing agreement with the European Commission (EC) which mandates member states to sign the EPAs as a bloc, rather than doing so as individual countries.
“Because of that binding agreement between ECOWAS and the European Commission, even if Ghana is willing to sign, it cannot do so because that agreement does not allow that. It mandates ECOWAS countries to act in bloc,” the source said in reaction to a story published on the risk Ghana faces if it does not sign the economic pact with the EU, its single largest trading partner, by October 1, 2016.
It said companies in Ghana which feared their exports to the EU risked higher tariffs, should direct their frustrations at the ECOWAS level and the European Commission to provide a special dispensation to Ghana because it had demonstrated willingness and good faith in signing the deal.
Last week, a group of companies which primarily export most or all of their produce to the EU market urged the government to expedite action on signing and ratifying EPAs or the interim agreement before the deadline, else their exports risk attracting tariffs and duties of up to 20.5 per cent for tuna.
Affected companies worried
The companies are not inspired by the seeming lack of clear direction by Ghana towards the signing of the bilateral trade agreement with the EU, barring which their produce to the EU market would be taxed higher, making their exports uncompetitive.
The GRAPHIC BUSINESS has gathered that the Trade and Industry Ministry will soon come up with its position on the situation.
Companies that currently export high volumes to the EU and which may be impacted negatively by any tariff hike include Pioneer Food Cannery Ltd, Cosmo Seafood Company Ltd; West African Fisheries Ltd and Myroc Foods Ltd, which are all tuna exporters, with Banana and pineapple exporters to be affected being Golden Exotics Ltd, Volta River Estate Ltd, Jei-River Farms and Bomart Farms, HPW Fresh and Dry and Blue Skies, among other companies.
Others are Sam Valley Farms; Melani Exports; Koranko Farms; Vegetables and Veg Pro, with cocoa products exporters such as Barry-Callebault, ADM and Cargill all risking higher duties if, at least, an interim EPA is not signed.
The companies together employ more than 10,000 Ghanaians and any negative impact would worsen the unemployment situation in the country. Already, Pioneer Food Cannery says its principals had frozen further investments in the country for the sake of uncertainties of exports prospects with the absence of any bilateral trade agreement.
Ghana initialled an interim EPA in December 2007 to avoid a similar tariff action after the preferential trade agreement the companies enjoyed under a previous treaty (the Cotonou Accord) expired 2000.
Since 2000, African, Caribbean and Pacific (ACP) countries had been working with the EU Commission to sign a non-preferential (reciprocal) bilateral trade treaty in which either side will offer both concessions and tariffs, but in a regime that favours the ACP countries more.
Ghana and other ECOWAS member states have thus been working as a regional bloc to sign the pact with the EU before the October 1 deadline, failure of which exports from Ghana, including canned tuna, cocoa products, horticultural products and fresh cuts will all be subjected to varying levels of tariffs.
The General Manager of Pioneer Food Cannery, Nichol J. Elizabeth, told the Daily Graphic that the future of their business in Ghana looked uncertain because in the absence of an agreement, there was no clear road map to signing any agreement, at least an interim one, to salvage the prospects of their business.
Pioneer Food alone employs about 2,000 people in its processing plant and about 300 others are engaged in its fishing business.
Like many of the companies affected, Pioneer Foods exports about 95 per cent of its produce to the EU market, with only about five per cent (Starkist) directed at the local market.
Mr Elizabeth said should Ghana fail to sign the pact, the company’s exports to the EU market would attract 20 per cent tariff which would render the business uncompetitive, especially as there was already a keen competition from South American, Pacific and Caribbean countries which had signed EPA with the EU.
Their fears are further heightened because with the EU Parliament rising in August Ghana could miss out on the ratification of the agreement should Ghana delay any further.
This is not the first time the industry has reacted to demand that the government signs the treaty with the EU. Similar concerns became rife in 2007 when ECOWAS missed the signing of a substantive agreement.
But the source told the Graphic Business that Ghana had no choice but to wait for the larger ECOWAS bloc even if it wanted to sign now.
It said other ECOWAS member states were not under any urgency to sign the agreement because their trade volumes with the EU were relatively small, as opposed to what pertained in Ghana and Cote d’Ivoire.
The EU is currently Ghana's largest trading partner. Trade between Ghana and the EU has been growing since 2000. The volume of trade was around €500 million as of last year.
Ghana shows good faith
Ghana, as part of the larger ECOWAS, was billed to sign the EPAs last year. Nigeria, however, chickened out of the pact last month to concentrate on other things.
Cote d’Ivoire has since the IEPA in 2007 signed a substantive agreement which secures its exports to the EU market, duty-free and quota-free on some items, such as agricultural and food items.
But Ghana has shown good faith towards signing the agreement as it has even drafted an EPA Accompanying Measures Strategy to support local competitiveness before the agreement comes into full force.
The Graphic Business source said the companies which export to the EU happen to all have their parent companies from the EU. They should rather put pressure on the European Commission (EC) to extend the interim agreement of 2007 and allow exports from Ghana quota-free duty-free. This is because, he said, Ghana had demonstrated its willingness to sign the agreement, but for the EC’s insistence on reaching a bloc agreement with ECOWAS.
If Ghana signs the EPA, it will be required to gradually eliminate tariffs on imports from the EU as per the market access offer, except for sensitive products – mostly agricultural – which have been listed in an exclusion list.
Disclaimer: The views expressed in this news report do not necessarily reflect the position of the National Development Planning Commission (NDPC)