Let’s scrutinise EPA
The debate over Ghana’s signing of an Economic Partnership Agreement (EPA) with the European Union (EU) has been resurrected, given that the country has to meet an October 1 deadline to ratify the trade pact.
Advertisement
The debate is an age-old one, following the expiration of the Cotonou Agreement signed in 2000 which offered unfettered EU market access to goods from partner African, Caribbean and Pacific (ACP) countries, mostly former colonies of European countries.
It replaced the Lome Convention which did not require the EU to slap equal trade tariffs on imports from ACP countries. The fundamental principles of the Cotonou Agreement include equality of partners, global participation, dialogue and regional integration, known broadly as the EPAs.
The agreement entered into force in April 2003 and was revised in 2005 and 2010, in accordance with the revision clause to re-examine the agreement every five years.
The road map was for ACP countries to sign the EPA by 2007 as regional blocs. Since ECOWAS could not sign it as a bloc, Ghana and countries such as Cote d’Ivoire had to sign interim agreements to forestall the EU slapping full tariffs on their exports.
Issues surrounding Ghana’s debate has largely bordered on whether the country had the capacity within its private sector to compete with the giants from Europe and, by extension, the ability to preserve local jobs.
Other concerns have been that the government will lose revenue from tariffs to be compromised under the 75 per cent free market access to be offered the Europeans over a 20-year period. This is because currently Europe is Ghana’s largest trading partner, accounting for 46 per cent of the country’s international trade value.
On the other hand, some exporters whose main market is the EU are urging the government on to go ahead with the signing to safeguard jobs which would be lost should the exports be banned.
The Daily Graphic believes that the debate is healthy, given the very importance of Ghana-EU relations.
We urge the government to take all sides of the debate into consideration and examine how best it could secure a deal which is in the prime interest of the country.
As was suggested by one of the panellists at the Graphic Business/ Stanbic Bank Breakfast Meeting, it is important for the country to conduct a comprehensive and objective impact assessment before deciding to rub shoulders with the EU under a reciprocal market access regime.
The Daily Graphic, therefore, appeals to the government to explore the opportunity to grow local businesses into regional and international giants. This way, it will receive a lot of revenue from them by way of taxes and revenue, while keeping its people in full employment.
The added benefit is that it could boost the country’s economy into an upper middle income country, which could entitle it to other forms of reciprocal trade pact with the EU.
Meanwhile, if the country fails to support its own, a moratorium of even 30 to 50 years under an EPA for Ghana to open its market will pass us by, but the country would still not be ready to match competition.
There is no better way to secure jobs than to build one’s local industrial base, and the time to do that is now.