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CONTENT

INTRODUCTION HOW EPA CAME INTO BEING POSITIVE EFFECTS OF EPA NEGATIVE EFFECTS OF EPA CONCLUSION SOME PICTURES ABOUT EPA

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INTRODUCTIONSOCIO-ECONOMIC EFFECT OF GHANA SIGNING THE ECONOMIC PARTNERSHIP AGREEMENT(EPA) WITH THE EUROPEAN UNION (EU) BEATRICE BEYUO SEM SHELIPSTICS BULATOR JOSEPHINE AKUA OSEI-YEBOAH SARAH DONPREH JULIUS ERIC KWAME OKYERE KONADU WIAFE FELIX AMIDU IBRAHIM SANNI OWURA AKWASI SARPONG4/15/2014

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HOW EPA CAME INTO BEING The economic partnership agreement is a scheme to create free trade area between the European union and African Caribbean and Pacific group of state. In 1971 the ACPs decided to negotiate a partnership agreement called the LOME convection. Their main aim was to grant non-reciprocal trade preferences for ACPs to facilitate the development of the ACPs country. The LOME convection lasted from 1975-2000. in the year 2000, the Contonou agreement was negotiated by the ACPs and the EU. Where by the Contonou also lasted from 2000-2007. In the year 2007 EPA also replaced the Contonou agreement.

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HOW EPA CAME INTO BEING On Thursday 13th Dec 2007, before the

expiry of the Contonou agreement Ghana and Ivory Coast negotiated the interim Economic Partnership Agreement (iEPA) with the EU. The agreement was sign by minister of trade and industry Mr Joe Badu Ansah on behalf of Ghana and Felliberto Ceriani Sebregodi on behalf of the European Union delegation in Ghana also sign on behalf on the European Union. This agreement was to allow 80% of the European goods into the Ghanaian market duty-free and quota free while Ghana will continuo to have 100% access to the European market 4/15/2014

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POSITIVE EFFECTS WIDER MARKET Good quality

product Development in the

country(technology and skilled personnel)

More investors are likely to enter into the country

Origin of export

LOWER PRICES In theory liberation

could benefit Ghanaian domestic sector that are heavily dependent on imported capital for their production

Cheaper raw materials.

Welfare of consumers Broader long term

development

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UNEMPLOYMENT Over 95% of Ghana’s exports to the European Union market

are primarily raw materials. Removing tariffs on the export of these raw materials as required by the EPA would make it cheaper for the European manufactures to import them, add value and export it to Ghana also at duty free prices. Agriculture is the mainstay of Ghana’s economy. It sustains the livelihood of millions of small-scale farmers and support part of the country’s industrialization. The elimination of tariff on EU imports will force many Ghanaian domestic producers to compete directly with EU firms, therefore Ghanaian producers would no longer remain profitable due to their much lower levels of industrial productivity as compared to the EU. For example, In 2002 the EU spent over US$1 billion subsidizing dairy export, over US$39.4 million in export subsidies for 132,000 metric tons of milled rice and roughly US$ 11.1 million for wheat, in context of the free trade area, these subsidies agriculture export will lower the price of these product in Ghana, pushing domestic producers out of the market which leads to unemployment.

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REDUCTION IN THE SECTORSThe signing of the agreement will open up the market to about 80% to importers to import goods from the European Union countries of tax free. Since most of these European goods enjoy better conditions of production, they will compete domestic products which are of low quality. Signing the EPAs will destroy their domestic market. Since the EPA is bilateral trade form, it will have the effect of blocking them out of the most important regional market like Nigeria which do not have the EPA. Also in the case of agriculture products like rice, the European countries are able to produce such product of high quality (perfume rice) as compare to our locally manufactured rice (tu-gimi) . So in this case people will be compel to patronize the foreign product(rice) leaving the locally manufactured ones. When these happens it will automatically leads to a reduction in the Ghanaian sectors which will severely affect the Ghanaian economy as well.

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REDUCTION IN GOVERNMENT REVENUE Due to the agreement, Ghana is supposed to export

goods which has 100% tax free on therm, in effect there is no tax imposed on export goods(goods moving out of the country), raw material which are available for domestic use will be exported into the European countries because of the tax free policy, these will not only affect export tax duties but also tax imposed on sales of domestic product in the country. It is therefore estimated that, signing the Economic Partnership agreement will cost government a tariff revenue to the tune of US$150million dollars ( thus according to MOTI) and an amount of US$374million dollars(according to the United Nations and South Centre) annually forgone on European imports

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CONCLUSION By entering into an EPA with the EU, ACP

members retain preferential treatment in regards to tariffs and quotas. In theory, the EPA will promote economic development and improve the quality of life of citizens within the member nation. However, as the nonreciprocal trade preferences phase out, member nations will lose income derived from charging tariffs on EU products. Whether or not the loss is significant will depend on how member nations have changed their fiscal policies. 4/15/2014

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SOME PICTURES ABOUT THE EPA

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Any decision on the Interim Economic Partnership Agreement (IEPA) will trigger a range of effects on different sectors. But the overall effect will be that Ghana will be worse off if she signs the EPA agreement. At the same time, what can be saved from not signing can be used to meet the problem posed by not signing it. The other way round is not possible. 4/15/2014

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QUESTIONS AND ANSWERS

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