The Association of Ghana Industries (AGI) has said that it is not against trade liberalisation through a bilateral agreement with the European Union (EU).The association said the interim Economic Partnership Agreement (EPA) between Ghana and the European Union (EU) should serve as a good opportunity for the country to review its policies towards industry and manufacturing.
The President of the association, Mr Tony Oteng-Gyasi, said this in a paper he presented to the Parliamentary Select Committee on Trade and Industry on the impact of the interim EPA on industries.
Mr Oteng-Gyasi said it was, however, the view of the association that trade liberalisation should not lead to job and revenue losses to both industries, the government and individuals.
“AGI is not anti-trade liberalisation. However, the AGI thinks trade liberalisation should not be allowed to lead to job and income losses to both the general public and the government,” he stated.
Ghana signed an interim EPA on Thursday, December 13, 2007 with the EU to replace the Cotonou Agreement which expired on December 31, last year.
Another non-reciprocal arrangement, the kind of the Cotonou Agreement, has since December 31, 2007 become ultra vires with the rules of the larger body, the World Trade Organisation (WTO) rules.
The AGI said having agreed to sign the EPA, it was time Ghana did a much comprehensive homework if it must reap the benefits of the agreement, particularly by putting its industries in place and sharpening their competitive capacity.
“This is a new opportunity for Ghana to review manufacturing industry policies and consider how to grow industry in an era of continuing trade liberalisation around the world,” Mr Oteng-Gyasi said.
The AGI president said although the country, for decades, had gained duty-free access to the EU market, its manufacturing sector had not experienced the needed growth to make that striking contribution to the Gross Domestic Product (GDP), saying manufacturing had always grown below the annual GDP growth rate.
“Manufacturing as a share of GDP is stuck around 23 per cent compared with 32 per cent in Namibia, 53 per cent in Botswana, 36 per cent in Egypt and 52 per cent in Malaysia,” the AGI president pointed out.
Primary and agricultural commodities were those that benefited under the Cotonou Agreement.He said while protection of the local manufacturing industry through high tariffs was necessary there should be a health and safety protection of the people as well as the environment through the strengthening of regulatory authorities.
The association also called for policies at the micro-level to assist small-and medium-scale enterprises to overcome their problems of old equipment and finance and also support them with export marketing, among others.
The AGI outlined a lot of such challenges as the need to negotiate an agreement that would emerge from the signing, and which would delay as long as possible the incoming duty-free goods, depending on how quickly the country improves its manufacturing environment.
Mr Oteng-Gyasi said it was to make the environment competitive for the local industry that the association was advocating the replacement of pre-production taxes with post-production taxes.
To prevent third party countries from routing their goods through the EU, the AGI suggested that negotiations on the rules of origin should be concluded with the EU and rigidly enforced.
Story by Samuel Doe Ablordeppey