The Third World Network has urged government to follow in the footsteps of some East African countries which have pulled out of the Economic Partnership Agreement (EPA) with the European Union(EU).
Tanzanian authorities have said they were pulling out of the EPA with the EU bloc.
The announcement made the east African nation, the second largest economy in the region, the first to pull out of the EPA from the East African Community (EAC) member countries.
Speaking recently at the citibusinessnews.com Breakfast Encounter, the Executive Director of the European Business Organization-Ghana, Nico van Staalduinen warned that Ghana could attract high tariffs on export of some items to the EU if parliament fails to conclude the ratification of the agreement between government and the EU by October 1 this year.
But speaking to Citi Business News, a Programme Officer of the Third World Network Africa, Sylvester Bagooro maintained that with the commencement of the Common External Tariff (CET), ratifying the pact will distort the move for regional integration and trade harmonization in the sub-region since Nigeria has refused to sign the EPA.
“The East African Community is supposed to sign the pact this month on 18th of July but then Tanzanian which is the second biggest economy after Kenya has pulled out. Uganda which is also part of that bloc is considering pulling out,” he said.
He explained that with the introduction of the CET, Ghana must aim at protecting the country’s infant industrial sector to produce for the countries on the continent.
“Looking at this agreement, it will not help us advance our industrial policies. I don’t think the government should get parliament to ratify it. We should pick lessons from the EAC,” he said.
He argued that opening the Ghanaian markets for imports from the EU will not sustain the economy since Ghana cannot compete with goods produced in the EU.
Proponents of the EPA
Supporters of the EPA have warned that Ghana risks losing millions of euros as parliament delays in ratifying the EPA.
In December 2007, Ghana initialed an interim EPA to avoid a similar tariff action after the preferential trade agreement enjoyed under a previous treaty, named the Cotonou Accord expired in the year 2000.
Since 2000, African, Caribbean and Pacific countries (ACP) had been working with the EU Commission to sign a non-preferential bilateral trade treaty in which either side would offer both tariffs and concession, but in a regime that favours the ACP countries more.
ECOWAS member states including Ghana have been working since 2000 to sign the pact as a sub-region with the EU.
Trade volume between EU and Ghana
Trade volume between the EU and Ghana as at 2013 was estimated at 11.2 billion euros from 1.9 billion euros in 2000.
Currently, the EU is Ghana’s biggest trading partner as trade volumes is further estimated to surge.
Trade analysts and financial experts have expressed worry over government’s lack of clear direction on the matter as income from EU is crucial for Ghana’s investment and economic expansion.
In all, Ghana’s delay in signing a substantive Economic Partnership Agreement (EPA) with the European Union means a 20.5 percent tariff increment looms.
Government has until October 1 this year, to sign unto the agreement even though its intentions are unclear, sending mixed signals to exporters who fear higher taxes would be slapped on their produce making it less competitive.
Some of the producers and exporters who have expressed worry include; agro processing companies such as Golden Exotics, HPW Fresh and Dry, Blue Skies, Barry Callebaut and other cocoa processing companies producing for the EU market.
Also, canned tuna exporters such as Pioneer Food Carney would be affected.
Ghana was unable to qualify as it was elevated to join a league of lower middle income countries.
By: Lawrence Segbefia/citibusinessnews.com/Ghana