The Trade and Industry Ministry says the Economic Partnership Agreement (EPA) between some West African states and the European Union (EU) is mutually advantageous if the West African parties could increase production.
Ghana and other West African countries, except three, have signed the reciprocal trade agreement and are in the process of ratification.
Speaking at the Ministry’s turn of the Meet the Press series, Dr Ekwow Spio-Garbrah, the sector Minister, said the EPA would engage in the gradual removal of duties over a period of 20 years on 75 per cent of imports from the EU into West Africa while West African countries would benefit from a duty-free-quota-free access to the EU for all imports.
Responding to concerns about this element of the partnership, in view of Ghana’s quest to minimise imports and increase production and exports, Dr Spio-Garbrah said the issue was not about imports, as European products were coming into Ghana anyway, but rather about the duty levels at which they would come in.
“The idea is for the European tariffs to keep going down while the African goods get into European markets at much lower tariffs than currently is the case. So we are supposed to have the advantage if we can produce more than we produce now and at a higher quality,” he said.
At the same time, tariffs on goods imported from the EU would be reduced by 75 per cent over the 20-year period.
“It’s a very long process. So if the tariff of European products today is 20 percent, maybe in two or three years, it becomes 18 percent, 15 percent, then 10 percent until it either becomes zero or a much lower rate over a 20 year period,” he said.
The key, he said, ‘is for Ghana and West Africa to produce the goods, as Ghanaian businesses did not take advantage of the United States’ African Growth and Opportunities Act (AGOA) to produce garments for export to the US market.
He said Ghana had the capacity to produce, citing availability of technology, human resources, and capital, even though power had been a problem; which justified Ghana’s signing of the agreement.
“We will never have them in place, you must sometimes sign to put pressure on yourself to fit…you haven’t passed the O level but sign to go to secondary school believing that over the five year period you’ll learn enough to pass the exam but if you want to know the exam questions and results before you register then you will never go to secondary school,” Dr Spio-Garbrah said.
Pending the ratification by the three outstanding countries, Ghana is considering four policy options which are: seeking an extension of the current EU regulation granting market access to Ghana and other interim EPA (IEPA) eligible countries from October 1, 2016 to October 1, 2017 or requesting for the favourable terms in the ECOWAS EPA to be incorporated into the IEPA which had more favourable terms for both parties and promotes regional integration.
The other options are to expedite action to sign and ratify the IEPA which was initialed in December 2007 to secure and guarantee uninterrupted market access for its exporters, or lastly, draw up compensation mechanisms for companies exporting to the EU, especially non-traditional exports before the end of August 2016 to mitigate any penalties or increased tariffs.
The Minister outlined other activities undertaken by the Ministry to enhance Ghana’s trade and industry position and transforming businesses and enterprises in the country.
These include work on policies such as the National Sugar Policy, National Quality Policy, Competition Policy, Intellectual Property Rights Policy Strategy and the Made in Ghana Campaign among other things.