Business News of 2014-04-12

‘Signing EPA or not will come with a cost’

Minister of Trade and Industry, Haruna Iddrisu has indicated that Ghana has no choice but to sign the controversial Economic Partnership Agreement with the European Union.

Speaking on Joy FM’s current affairs programme, Newsfile, Saturday, he maintained that whether the country signs the agreement, which has largely been criticised by various interest groups, or not, it has an “economic adjustment cost” to bear.

He therefore described the EPA as a “double edged sword”.

Economic Partnership Agreements is a trade and development agreement negotiated between the EU and African, Caribbean and Pacific countries (ACP) engaged in a regional economic integration process.

It was a response to continuing criticism that the non-reciprocal and discriminating preferential trade agreements offered by the EU to these countries are incompatible with WTO rules.

Ghana in 2007 signed an interim agreement giving the EU 80% access to Ghana's market.

After various agreements by the EU-ACP - at Cotonou and Lome -, ECOWAS countries have been given an October 2014 deadline to sign the agreement or be denied access to the EU market.

The agreement allows Ghana to have 100 percent access to the European market except for rice and sugar, while EU countries will have 75 percent access to the Ghanaian market duty free and quota free.

Currently, over 40% of the country’s export goes into the EU market.

Haruna Iddrisu therefore wondered what will happen to the national economy when the EU denies the nation entry, and predicted “dire consequences” for Ghana.

“The fear of losing the EU market, the fear of losing investment makes it compelling to have an arrangement of a sort,” he asserted.

He said ECOWAS heads of state have agreed to the partnership but added there are certain market access clauses in the agreement that they have tasked four nations including Ghana to re-negotiate.

Even though Nigeria has done fiscal impact assessment and believe that signing it will cost the nation 1 trillion dollars, Haruna Iddrisu admitted Ghana has failed to do same since 2007.

But the UN Economic Commission for Africa says Ghana is expected to lose 300 million dollars in revenue every year if it signs the EPA with the EU.

However, the Trade and Industry Minister said signing the partnership will challenge Ghana to build its competitiveness, increase the capacity of local industries, and increase export to take advantage of the opportunity.

"Will you like to take a risk to lose 49 percent of your export volume? I am not sure that if I were to give advice, I will give advice on the basis that don’t go into this relationship,” he said.

He warned that Ivory Coast has already signed the agreement and is left with ratifying it, which places Ghana in a precarious situation as a next door neighbour.

Source: myjoyonline.com
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