Economic Partnership Agreement......... Ghana going. Gone? African stance on engagements with the west has always been rooted in exploitation by the west. This forms the basis whether consciously or not in analysing any trade agreement offer from the west. The Neo-colonial sentiments in our thoughts makes it difficult to have an objective assessments of our engagements with the west and possibly identify avenues in such agreements we can also exploit. It is therefore not surprising that in the EPA agreement even those of us with little or no economic background and appreciation have jumped to the usual bandwagon of protestation with the simple logic that they say we should open our markets to them without charge and they will bring in their goods. Many of those who even comment on this agreement havent had the time to read through neither do they have the slightest idea of the economic sectors of Ghana and the relationship between such an agreement and these sectors. Can we for once put aside our Neo-colonial cups and engage In a modern economic analysis in an ever changing global stage? For well over 30 years now, Ghana has enjoyed a free trade arrangement for its exports to the European Union under the Everything But Arms(EBA) agreement. Interestingly, the huge tariffs imposed by government on European goods makes even such goods with same quality from the United States cheaper and Europe expensive( foreign exchange also a factor). The expensive nature of such European goods makes the U.S and china goods much more marketable thereby giving the United States and Chinese goods unfair advantage and a monopoly of our markets. The likely effect of an EPA with Europe has the dual effects of enhancing competition amongst the developed nations and eventual reduction of prices for consumers. This can lead to massive injections of foreign direct investments as these corporations will now wish to move to Ghana to further cut down cost of production thereby creating jobs and knowledge transfers for the local people. Jobs governments have failed to create decades after independence but unfortunately have made their electoral mantra to win votes. The argument on protection of local industries. Liberalised EU exports are mostly industrialised machines(pumps,generators,turbines, boats and chemicals etc). These are mainly inputs used by companies in Ghana and hence a removal of tariffs on them leads to lower prices and by extension lower production costs for local businesses that uses such inputs. The complaint of our local industries has always been the higher cost of production makes them not competitive which is basically as a result of expensive inputs they import to aid production. Expensive largely because of government tariffs on such inputs. Sadly, it appears our definition of local industries are only limited to traditional sectors of production that we believe use 100% local content in its operations ( I cant honestly think of any now). Secondly, where at all are our local industries that we have been protecting since independence? Must we always use that as an excuse not to try something new? Mind you, the imposition of trade barriers through tariffs are not the only ways of empowering so called local industries. Even with an EPA that liberalises trade, Government can still embark on a policy to empower local industries by making available to them cheap and ready credit for their operations and this I guess was the reasoning behind the setting up of the National Investment Bank which has yielded little success( the problem is attitudinal not liberalised trade or exploitation). The 20% flexibility clause in the EPA also gives government the opportunity to protect up to 20% of what we consider sensitive local sectors of our economy. How many are even our so called local industries based on our definition? Please note, I dont expect a common response from Ecowas member states to the EPA since we all have our different economic frameworks and its impact on us vary. Might be good for Ghana if that bad for Nigeria..... The difference is in our economic frameworks!
Posted on: Sun, 30 Mar 2014 07:50:31 +0000
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