African countries call for 25 years moratorium to strengthen Local industries before signing the EPAs

African countries call for 25 years moratorium to strengthen local industries before signing the EPAs
Masahudu Ankiilu Kunateh, Ghanadot

Accra, May 20, Ghanadot - A Regional Economic Partnership Agreement (EPA) encompassing West African and EU is expected to be signed later this year.

Negotiations are far advanced for a draft agreement by June 2009, and subsequently a full pact by the end of the year.

However, a number of African countries, all potential members of the EPAs, have some citizens and organizations calling on their governments not to hurriedly conclude the deal.

The latest to express misgivings about the EPA that some call obnoxious trade regime which is being forced on the African countries by their European counterparts are Ghanaian farmers.

In an exclusive interview with the President of the National Farmers and Fishermen Awards Winner Association of Ghana (NFFAWAG) in Accra yesterday, Mr. Philip Abayori called for 25 years moratorium to strengthen local industries before signing on to the EPA.

He stressed African countries could not compete favourable with the European countries in every aspect of trade, “saying European countries give subsidies to their farmers while African countries do not”.

Instructively, Ghana, in 2007, signed an interim Economic Partnership Agreements (EPAs)-light with the European Commission making her second after Cote d’Ivoire to sign the deal.

The move was to insulate the two countries from a disruption of their exports after preferential trade terms expired at the end of that year.

The decision by the Ghanaian government to sign the EPA, however, was met with a lot of backlashes from civil society organizations which argued that the trade agreements would only allow the European Commission to lock Ghana and other African countries into aspects of the EPAs, over which there were still fundamental disagreements, including issues which had never been part of the negotiations.

Indeed, the Interim EPAs are free trade agreements which deal only with trade in goods. This means that signatory African countries must therefore eliminate tariffs on “substantially all” European goods.

The implications of the Interim EPAs are many but include:

Lost Revenue: By dropping tariffs on most European products (from 80-98%), African countries would lose significant amount of revenue to their economies.

A study of the Interim EPAs identified gigantic revenue losses, such as in Kenya, Cameroon and Ghana a total of $39.5 million, $99million and $162 million respectively.

Lost policy space: African countries would entirely drop tariffs on 80-98% of all European imports.

Currently, if faced with a sudden surge of European goods, like milk that drives the price down, African governments can raise the import tariffs to protect African diary farmers. With the Interim EPAs, even if powdered milk is one of the few “protected” products, the Standstill Clause will not allow its applied tariff to be raised.

Touching on issues confronting the agricultural sector, Mr. Abayori mentioned the lack of subsidies for Ghanaian farmers, high cost of farming inputs, over liberalization of the Ghana’s market to the advantage of foreign goods.

He therefore called on Professor Mills led government to address the above challenges so as to refrain the country from depending on donor supports.

Ghanadot