In accordance with the provisions of the Cotonou Agreement, the countries of the West African region (ECOWAS and Mauritania) agreed with the EU to negotiate an Economic Partnership Agreement, designed as a tool for development and regional integration. The regional EPA provides duty-free and quota-free access to the EU market for an unlimited period for all imports originating in Ghana. In return, Ghana and other West African countries gradually liberalize 75% of their imports from the EU over 20 years. This asymmetric and gradual opening of the Ghanaian market to European goods takes into account the different level of development between Ghana and the EU and affords enough flexibility to protect sensitive sectors as well as to preserve fiscal revenues. Liberalized imports from the EU are mainly goods which are not produced locally, notably inputs used by local industries, such as agricultural inputs, for instance fertilisers and seeds as well as equipment and machinery needed for manufacturing. Therefore, the elimination of import tariffs will reduce the production costs of local companies and will also benefit Ghanaian consumers. In order to protect sensitive sectors, a number of agricultural and non-agricultural products, such as chicken, goat and swine meat, tomatoes (fresh and prepared), sugar, palm oil, cocoa powder, soap, woven and printed fabrics of cotton, flour, frozen fish, and beer have been excluded from liberalization.
In terms of trade volumes, around 35% of EU exports into Ghana are already liberalized or nearly liberalized, de facto leaving only an additional 40% of imports to be liberalized. The reductions of duties will be done gradually over several years to keep the initial revenue loss small and spread the impact over many years. The EPA also has a chapter on trade defence instruments, which provides for safeguard measures in case of disruption or risk of disruption, a chapter on technical barriers to trade and on sanitary and phyto-sanitary measures to help Ghanaian exporters to comply with international standards, a chapter on trade facilitation, and a dispute settlement mechanism.
Rules of origin in the regional EPA are also very favourable, providing for asymmetry between West Africa and the EU, as well as for very generous cumulation provisions. Further negotiations are also possible on services and trade-related issues.
The development-cooperation dimension of the agreement provides for support aimed at improving the business environment, accelerating regional integration, as well as strengthening and diversifying productive sectors. The agreement also envisages support to address the fiscal impact and related reforms.
In summary, the objectives of the EPA are simple: increase productive investments and job creation in Ghana and West Africa, and intensify and facilitate trade between Ghana, the region and the EU towards a win-win development relationship.
The EU welcomes the conclusion of negotiations for the regional EPA and looks forward to its ratification and full implementation. In the absence of the regional EPA, Ghana will benefit from the EU's Generalised System of Preferences, which offers a less advantageous level of preferences as shown in table 1 below.
Table 1: Ghanaian exports to the EU, tariff rates under the EPA and GSP, 2014
|Exports total value EUR million||Tariff rates under the EPA||Tariff rates under GSP|
|Prepared or preserved tunas and skipjack||111.4||0.0||20.5|
|Bananas, fresh (excl. plantains)||30.2||0.0||132 €/t|
|Cocoa butter, fat and oil||153.5||0.0||4.2|
|TOTAL||EUR 491 Million||0.0||Various|
Source: EUROSTAT and the TARIC databases.
Moreover, the EPA provides a stable and predictable trade partnership attractive to investors. As part of the agreement, EPA institutions will be created, which will be the key forum for dialogue between the two parties, comprising of ministers or senior representatives who meet regularly or when required. The regional EPA also contains a joint parliamentary committee and a consultative committee made up of representatives of civil-society and private-sector bodies.