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Ghana: Country's 'Stepping Stone' Trade Deal With EU May Well Be a Sellout
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Public Agenda (Accra)
17 December 2007
Posted to the web 17 December 2007
Despite all expectations Ghana has signed an interim trade deal to liberalise 80 per cent of its trade with the European Union (EU), which in turn has offered 100 per cent quota-free and duty-free access to Ghanaian goods, except sugar and rice.
The signing followed weeks of negotiations between the two sides in a move to safeguard the country's exports after preferential trade terms expire at the end of this year.
Mr Joe Baidoe-Ansah, Minister of Trade, Industry, and the head of the EU delegation in Ghana, Filiberto Ceriani Sebregondi, initialled the deal, which they described as a Stepping Stone Economic Partnership Agreement (EPA), at the Castle, Osu, a deal which has been described by civil society groups as a complete sellout of Ghana's interests to the EU.
The deals covers goods only and will be replaced by a comprehensive EPA when it is concluded.
The World Trade Organisation (WTO) deems favourable EU trade terms for nearly 80 African, Caribbean and Pacific countries illegal and a waiver expires on Dec. 31.
The EU had hoped to sign WTO-compliant EPAs with six regional blocs covering a host of trade and investment issues, but negotiations with West Africa and other regions have missed the deadline.
"This stepping stone agreement helps therefore to avoid serious trade disruption between Ghana and the European Union," said Mr Joe Baidoe-Ansah, whose portfolio also covers Private Sector Development and President's Special Initiatives. Earlier this year the Ministry of Trade and Industries slapped a temporary ban on imported tomato, a move which attracted praise from many Ghanaians, but the signing an interim EPA is seen as an 'about turn' on the part of a government which was beginning to show it had teeth to bite Ghana has become the second West African country to sign an interim agreement, as developing countries rush to prevent disruption in their exports to the EU, the world's biggest trading bloc.
Neighbouring Ivory Coast was the first in the region to initial an interim trade deal in goods last week, in a move some said broke ranks with the position of the Economic Community of West African States (ECOWAS) that the deadline should be extended to allow for broader negotiations.
But ECOWAS Commission President Mohamed Ibn Chambas told the Ghana News Agency in an interview that the community supported specific interim arrangements to allow exports of goods only to continue, so long as they did not pre-empt talks on a broader regional EPA text.
"We definitely do not object to these individual negotiations with the EU, while we continue to engage our European partners in order to resolve the thorny issues around the substantive EPA," Dr Chambas said, adding that regional-level talks would resume on December 17.
He saidboth Ivory Coast and Ghanahadassuredhis Commission that theywere only signing an interim deal to prevent the disruption of direct trading of goods after December 31.
"We are very much concern and share in their view that there should be some interim arrangement put in place, otherwise the livelihood of the people could be jeopardised," Dr Chambas said, citing Ivory Coast'stroubledpast which, he added, needed uninterrupted flow of trade incometo make up for the loss.
Dr Chambas said while encouraging interim trade deals by individual countries, ECOWAS expected to see those countries in solidarity with the "common position" of the bloc in its call for an extension of the deadline and the removal of some of the proposals deemed inimical to theregion'sinvestment rules andintegration process.
"We have made it clear to our members that they should leave the negotiations on the EPA for ECOWAS and we'd continue to repeat this point to ensure regional solidarity. He added: "We are happy to hear that Ghana has insisted on our position regardingthe Singapore issue. It must be negotiated and we do not intend to back down on this."
He said it was significant thatevery member country should only negotiate and sign deals that are in the best interest of their people. Nigeria, ECOWAS' biggest economy, has shunned any deal and its huge oil exports would be unaffected.
Like the deal struck last week by Ivory Coast, Ghana's interim agreement provides for the immediate abolition of tariffs on virtually all exports to Europe, and for the gradual dismantling over 15 years of tariffs on 80 percent of imports from the 27-member bloc.
The remaining 20 percent of imports are deemed "sensitive products" which will be subject to tariffs even after the 15-year transition period to promote economic development, food security, employment and government revenue generation.
The deal also abolished quotas on Ghana's banana and tuna exports, meaning the country could ship as much of those products to the EU as it could sell, Mr Sebregondi told reporters.
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Even after Dec. 1, the poorest countries will still qualify for preferential trade terms under Europe's "everything but arms" initiative, making it more urgent for the slightly better off countries to strike alternative trade deals.
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