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No Export Ban - EU
 
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30-Sep-2014  
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Even though the Economic Community of West African States (ECOWAS) has not signed the European Union (EU) Economic Partnership Agreement (EPA), there will be no trade disruptions on October 1, 2014, which is the deadline.

The Chargé d'affaires of the EU delegation in Ghana Mr Judikael Regnaut disclosed this to The Finder in an exclusive interview in Accra.

"Following the definitive endorsement of the EPA by ECOWAS Heads of States, the EU managed to find a transitional solution to avoid trade disruption on October 1 while procedures necessary for the full entry into force of the regional EPA are ongoing. As a result, Ghana and Ivory Coast can benefit from uninterrupted access to the EU,” he added.

He explained that the process of signature and entry into force depends on several factors and procedures and the EU cannot, as of now, provide an accurate date, but hopes this would take place as soon as possible, in order to make sure EPA benefits are enjoyed as soon as possible and the private sector is provided with the needed legal certainty needed to support investment and growth.

According to him, the EU has found a transitional solution to avoid trade disruption that could affect Ghana and Ivory Coast, who signed an interim bilateral EPA in 2007.

He however warned that even though no date has been fixed for the transitional period, it would be short probably up to the end of December this year.

He explained that since ECOWAS leaders endorsed the EPA in July, it is EU’s expectation that the leaders would sign the full EPA at their next meeting in December to pave way for ratification by parliaments of ECOWAS countries.

The EPA allows Ghana to have 100% access to the European Market, except for rice and sugar over a 20-year phase-in period, while EU countries will have 75% access to the Ghanaian market duty-free and quota-free.

The EU will also give ECOWAS €6.4 billion to manage the cost of adjusting to the EPA.

Civil Society Organisations and trade unions have kicked against the EPAs, but Heads of State of the Economic Community of West African States (ECOWAS) have agreed in principle to sign the EPA before the October 1 deadline.

The Caribbean Community (CARICOM), an organisation which consists of 15 Caribbean nations and dependencies, signed the EPA in October 2008. The Caribbean is so far the only ACP group to sign on to a “full” EPA.

It has now emerged that CARICOM’s trade balance with the EU has worsened since the agreement was signed.

Studies conducted revealed that Caribbean small exporters have reported substantial non-tariff barriers in accessing the EU market, including Sanitary and phytosanitary measures (SPS), Technical Barriers to Trade (TBT), and Return on Investment (ROI).

Traditional exporters have lost ground from EU banana agreement and Free Trade Agreements (FTAs) concluded with Latin American & Asian countries.

In addition, Mutual Recognition Agreements necessary to access the EU’s services markets are not yet in place.

Studies have also revealed that the promised Aid for Trade has not materialised since the EPA was signed in 2008.

The EU’s proposed differentiation policy also means a substantial diminution of aid flows to the Caribbean.

Major disagreements between the Forum of the Caribbean Group of African, Caribbean and Pacific (ACP) States (CARIFORUM) and the EU have emerged over the interpretation/wording of certain clauses of the EPA.

The EPA has in effect sidelined the CARICOM integration scheme, CARICOM Single Market and Economy (CSME).

Five years on, virtually none of what the tourism sector hoped for has happened and the industry, which is nothing if not practical and delivery-oriented, has largely given up on the EPA as time wasting and is asking why.

EPA provisions have not been fully implemented in many Caribbean nations; the accompanying development assistance is controlled by CARICOM and European bureaucracies that in many instances are antipathetic to the ethos of the private sector or tourism.

The institutions of the EPA scarcely function; and money is more easily spent on consultants, meetings, travel and reports than on small viable cost-sharing projects of demonstrable practical value.

Dr Yao Graham, Co-ordinator of the Third World Network Africa (TWN-Africa), believes that ECOWAS Heads of State agreed to sign the deal for fear of losing aide, especially French-speaking West Africa.

Critics say ECOWAS must analyse other workable alternatives before agreeing to the controversial trade deal, which it warns will cripple domestic industries if accepted in its current form.

The Economic Justice Network (EJN), one of the most vocal critics of the EPA, includes civil society think-tank Third World Network-Africa, the Trades Union Congress, the Ghana Chamber of Commerce, and the Christian Council.

The Network said government can use part of the import tariff revenue it will save from not signing the EPA to absorb the taxes that will be slapped on exporters by the EU.

Without the EPA, 72% of Ghana’s exports to the EU will still benefit from duty-free, quota-free access while 28% – mainly tuna, fruits and vegetables, and cocoa butter and paste –will face duties.

The combined import duty of these three major product categories is US$52 million annually and government can absorb this amount using part of an estimated US$416 million of import-tariff revenue that will be saved if the EPA is not signed. Support can also be given to these industries to find new markets.

A significant number of countries are doing this, including Namibia, which is helping its beef sector diversify while not signing the EPA.

Analysts believe the preferences which the exporters currently enjoy – and which will be protected with the EPA – are being eroded and will be very little by the end of the Doha round of negotiations.

Most Ghanaian exporters have to diversify in the long-term and become competitive outside preferences.

Ignoring this option - which will safeguard revenue, jobs, policy space and national sovereignty - will deliver a net cost to the nation, according to critics.
Comparing potential jobs that would be threatened, critics say less than 5,000 jobs in the local economy would be put at risk if the EPA is not signed, whereas a minimum of 43,000 direct jobs could be lost if the EU is granted unfettered access to the domestic market.

The EJN also repeated its criticism of the Most Favoured Nation (MFN) clause in the EPA, which guarantees the EU equal terms to any bilateral trade deals ECOWAS may negotiate with other parties in future.

The network said this clause limits the possibility of Ghana or West Africa entering into any trade agreement with other developing countries such as China, India or Brazil.

Without the EPA, Ghana has the large ECOWAS market to tap into, with promising prospects in financial services and infrastructure, the EJN argued.
 
 
 
Source: The Finder
 
 

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