We Must Brace For Economic Partnership Agreement

Ghana must stop dithering on the controversial Economic Partnership Agreement (EPA) with the European Union and brace itself for competition from the global market, Dr. Joe Abbey of the Centre for Policy Analysis (CEPA) has said. He said while Europe has got itself prepared for the EPA, Ghana has been “pussyfooting” and “now will pay for it”. Speaking last week at the launch of a book on Globalisation, Trade and Poverty in Ghana, Dr. Abbey said opening up to the rest of the world is not “optional” for Ghana, and that the country should rather prepare itself to take advantage of the bigger global market. “For me, the question is how do we reduce the cost of doing business in this country? That is the way to make ourselves competitive,” he said. “We must understand that we cannot be in a world in which we are afraid of competition; rather, we must lower the cost of doing business in Ghana. That is the only way we can liberalise and still be able to survive.” “Radical Ideologues” Dr. Abbey’s comments come amid heightened advocacy by civil society actors, who have been counselling government against signing the EPA -- a scheme to create a free trade area between the European Union on one side and the African, Caribbean and Pacific Group of States (ACP) on the other. Among other provisions under the EPA, the EU will liberalise 100 percent (except rice and sugar) of its trade with ACP countries -- this means that except for those two, all goods originating from ACP nations including Ghana can enter the EU territories 100 percent quota- and tariff-free. In turn, ACP countries will liberalise 80 percent of duties on imports from the EU over a 15-year period. The Economic Justice Network (EJN), a coalition of civil society organisations, said in May that Ghana will lose US$378million if it signs the EPA. But Dr. Abbey said: “radical ideologues” in the country have hijacked the negotiation process by condemning the EPAs without offering solutions. “For me, it is the ideologues that have wasted our time. They are the ones that must be talked to; they must come with analyses or shut up.” He added that Ghana cannot go on complaining forever, likening the situation to a fretful student who, instead of preparing himself for an examination, chooses rather to moan about the possibility of failure. “You must accept that there is going to be exams and stop pussyfooting and wasting everybody’s time. Globalisation is not something that is optional; it is not optional for Ghana.” China, not Europe, is the threat Europe, according to the CEPA boss, is not the biggest threat to Africa’s economy but cheap imports from China and other Asian countries. He said Ghana cannot go the way of Nigeria which has objected to the EPA because that country boasts a large domestic market and gets sufficient foreign exchange from oil exports. “Nigeria doesn't want to concede anything because it doesn't need anybody’s market. Sooner or later, Ghana will come to the realization that its domestic economy is too small and cannot hide from the global economy.” Interim EPA The EPAs are a key element of the Cotonou Agreement, a treaty for development cooperation between the EU and ACP states, and were supposed to have taken effect in 2008. But disagreements among the partners have stalled the negotiations and held back implementation. Before the 2008 deadline, however, Ghana and La Côte D’Ivoire, members of ECOWAS -- one of the seven regional groupings of ACP countries negotiating the agreements with the EU -- went ahead to “initial” an Interim EPA (IEPA). This allowed the two countries to continue benefitting from quota- and duty-free access to the EU market while they concluded negotiations for a full EPA. The European Commission has said that, by early 2014, countries which fail to ratify the EPA will cease to benefit from preferential trade terms with the EU. “Ghana can no longer linger on the question of signature and ratification: the country now has to ratify the IEPA quickly, otherwise it risks losing important trade preferences -- which could derail some economic sectors (in agro-industry and fishery) and lead to high unemployment,” said the EU on its official position regarding the matter. Awaiting ECOWAS consensus In August, Trade and Industry Minister, Hannah Tetteh, told the B&FT that government was actively engaged in discussions toward having an ECOWAS platform for the ratification of the full EPA. “But as a country we have the interim EPA as a fall-back should we not reach a consensus within the stipulated time-frame. “It is true that in signing the full EPA we will gain in some areas and lose in others, but we need to measure the gains against the losses and decide on what is best for the nation,” she said.