The case against the Economic Partnership Agreement

A statement by the Ghana National CSO Platform on EPA
30 August 2011
Article

One of the main lessons of the global economic crisis that has cast its shadow since 2008 is that this is the time to be diversifying trade away from over-reliance on EU markets. It is clear to all observers that the economic chaos engulfing the EU in its euro-zone heartlands shows no end in sight and the prospect of long- term stagnation is becoming ever more real.

Ghana will host the ECOWAS Ministerial Monitoring Committee on EPAs in Accra in September 2011. The MMC is the highest EPA authority for ECOWAS and its member states. In the run up to this we, the National CSO Platform on EPA, wish to urgently share a number of growing concerns with Ghanaians:   Ghana initialled a separate IEPA with the European Union four years ago ostensibly to end uncertainty and protect a very small group of exporters who depend almost exclusively on the EU market as their products would have attracted additional tariffs upon expiration of the preference regime for some Ghanaian and Africa, Caribbean and Pacific exports in December 2007.

 Much has changed since then, including the onset of a global financial and economic crisis. The other change is in the shifting centre of gravity of the global economy from regions like Europe to East Asia. Our contention is that the IEPA must be abandoned. It is a threat to the re-positioning of the national economy and to regional integration in ECOWAS. We urge the government to do so for the MMC meeting it will host in September.

We also call on the Government of Ghana to expeditiously clear up this damaging uncertainty whose most tangible manifestation is the treacherous existence of the Ghana IEPA alongside the regional ECOWAS EPA positions and process.

The IEPA was also explained as a temporary measure meant to assuage specific issues of non-LDC countries in West Africa such as Cote d’Ivoire, Nigeria and Ghana, pending harmonisation and completion at the ECOWAS level. War-ravaged Cote d’Ivoire has since finalised and ratified its IEPA as a substantive bilateral agreement. This year, Ministry of Trade and Industry officials have echoed the European Commission (EC) Delegation in Accra in giving strong signals that Ghana will follow suit.

The sub-regional economic bloc, ECOWAS which is current headed by another Ghanaian, Victor Gbeho, has rejected the Ghana IEPA as a template for the sub-region. The Ghana IEPA is onerous and indeed inimical to the country’s development and to the region, yet government is threatening to make the IEPA a permanent agreement.

The IEPAs as an additional trade regime will further fragment and eventually derail harmonisation of West Africa’s regional position and regional integration.

As the only country currently in the West Africa region with an IEPA which hangs like a sword of Damocles over ECOWAS as well as over the country’s own broader, longer-term and comprehensive national economic interests (constituted by the needs of all production and livelihood sectors taken together), the Ghana IEPA is today not a tool for allaying uncertainty but rather for magnifying it to dangerous levels.

We therefore urge Ghana Government to reject the IEPAs and join the ECOWAS harmonisation and integration process as the country’s current approach has introduced confusion in these regional EPA processes. Ghana’s current stance further threatens to introduce multiple trade regimes in West Africa, a very dangerous step. Ghana’s position is also holding to ransom the country’s economy and the much larger Ghanaian exporting community that is less dependent on the EU market.

The IEPAs remain a Trojan horse as it will make it easier for the overall EPA process (among others) to override, as well as block progress towards West Africa’s regional efforts to develop coherent common tariff regimes that provide sufficient developmental space (even the small step towards to trying to implement a 5th band in the ECOWAS Common External Tariff is being blocked by the EU), the EU’s demands and pressure in areas that go beyond tariffs and WTO commitments – such as Financial Services, Public Procurement, Investment, Health, Raw Materials and Natural Resources - pose even greater threats and are of more strategic importance to Africa’s economic transformation, industrialization and overall development.

The unprecedented trade and economic liberalization commitments that the EU is seeking to impose on Africa’s regions as well as the institutional predominance of EPA mechanisms over Africa’s own regional arrangements are a clear and present danger to the kind of self-defined developmental Regional Integration whose prioritization and necessity has been even more starkly affirmed by the ongoing global Crises.

EPAs in current global economic context

One of the main lessons of the global economic crisis that has cast its shadow since 2008 is that this is the time to be diversifying trade away from over-reliance on EU markets. It is clear to all observers that the economic chaos engulfing the EU in its euro-zone heartlands shows no end in sight and the prospect of long- term stagnation is becoming ever more real.

A second lesson is that autonomous Regional Integration and the upgrading of domestic market linkages within such a framework is the best bulwark against external shocks and for recovery from such global recessions. It is also increasingly recognised as the best orientation for long-term sustained growth as well as economic transformation.

Today, more than 90 per cent of Ghana’s most dynamic manufacturing exports go to the West Africa sub-region. As we have already discussed, the EPAs directly undermine this. The third lesson of the global crisis is the enduring problem of our continued primary commodity dependence. The EPAs constitute the most important barrier to every one of these possibilities.

This is clearly not the time to lock Ghana and ECOWAS’ long-term trade and development prospects into an irreversible agreement that gives EU trade preference over every other trade partner.

* A statement by the Ghana National CSO Platform on EPA.