Free Trade Agreements are they good for Africa?

Free trade agreements (FTAs) have proved to be one of the best ways to open up markets to importers and exporters. It would be interesting to know exactly who benefits for this free trade agreement. This free trade agreement depends on the product. For example, if we say rice. A free trade in rice would mean that the people of the importing country would be able to buy rice cheaply. However, the downside of this free trade is that the indigenous rice growers in a developing country would find it hard to compete with the price of imported rice. Under free trade theory, the farmers would just swap to growing another crop, which has less competition. It is a fact that this strategy in a developing country farmers often do not have the means to easily swap to different crops.

Consequently, many farmers are put in a dilemma of having to give up farming and try to find employment in the cites. The net result therefore of some free trade can be negative, particularly in developing countries.

Free trade for any product your country does not produce is brilliant, because it offers the consumer the opportunity get a product at the best price. On the other hand, for other products the Government would need to balance the benefits against the loss. Developing countries should consider a system of tariffs to help protect domestic production.

However in doing so it would be helpful if these tariffs are low enough to still stimulate competition between imported and domestic products otherwise the domestic producers have no incentives to become efficient, they need to be efficient if they wish to enter the world market. Competition is good, but large multi-national companies can easily dominate small developing markets and act as a monopoly; nearly all developed countries legislate against monopolies with good reason.

Large, developed countries are keen to have free trade in everything because it is to their benefit. The market is big and farming is well

mechanised, production is usually large scale with efficiencies of scale.

This is actually harmful to business activity in smaller

developing countries, particularly the small farmers in rural areas.

Where does Ghana stand in any of these trade agreements? Ghana among all the West African countries has almost all the resources it needs yet we are importing rice and tomatoes. Is the free trade agreement causing this thus bring more unemployment into our regions?