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John Mahama and the Destiny of ECOWAS

free trade

Photo Reporting: John Mahama and the Destiny of ECOWASJohn Mahama and the Destiny of ECOWAS

Why ECOWAS must accept EPAs with Relevant Statutory Consumer Rights and Regulations: Resisting Economic Partnership Agreement (EPA) Against the Backlash of a twitted US-EU Boko Haram internal security showdown

BRIEFS & MEMOS

The Economic Community of West African States (ECOWAS) was created on 28 May 1975 by the Treaty of Lagos, in Lagos, Nigeria. It’ was created to promote economic trade, national cooperation, and monetary union, for growth and development throughout West Africa. Its four commissions deal with the following functions: Trading, immigration, monetary interaction; industry, natural resources, and agriculture; transportation and communications and social and cultural issues. The 15 pioneer members were: Benin, Côte d'Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania (left 2002), Niger, Nigeria, Senegal, Sierra Leone, Togo and Burkina Faso (then, Upper Volta). Cape Verde joined in 1977. A revised treaty intended to accelerate integration of economic policy and improve political cooperation was signed on 24 July 1993. It sets out the goals of a common economic market, a single currency, the creation of a West African parliament, economic and social councils, and a court of justice. The treaty also lays the burden of settling regional conflicts on the treaty members. To this end there is also a Mutual Defence Protocol: a non-standing army deployed in the region as ECOMOG. [1]

INTRODUCTION

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The legal framework of EPAs is defined by the World Trade Organisation (WTO) rules- Article XXIV of the General Agreement on Tariffs and Trade (GATT) pertaining to Regional Trade Agreements, and the Cotonou Agreement which governs the EU-ACP relationship. One of the WTO’s fundamental principles is non discrimination among Members. Based on the so-called ‘most-favoured-nation’ (MFN) treatment, WTO Members are called to guarantee identical trade concessions to all of their (WTO members) trading partners. However, some exceptions are allowed. Art XXIV of GATT 1947 enables the conclusion of RTAs provided that some basic conditions are met. According to Article XXIV of GATT, free trade agreements (FTAs) and customs unions enable closer economic integration and may facilitate trade between contracting parties. As a rule, regulations applicable to a new FTA entity should not be more restrictive and duties should not be higher than any of those existing before its creation. Furthermore, interim agreements must be transformed into fully-fledged FTAs (or customs unions) within a reasonable period of time. (GATT 1947, Art 1 (General Most-Favoured-Nation Treatment)[2]


COMMENTARY

President John Dramani Mahama is the 24th chairman of the ECOWAS. The regional grouping elected him on its 44th session to become the third Ghanaian president after Jerry John Rawlings (1994-1996) and John Agyekum Kufuor (2003-2005). Speaking to Daily Graphic Sebastian Syme [3], via telephone from Cote d' Ivoire, the Minister of Foreign Affairs and Regional Integration- Ms Hannah Tetteh, was quoted to have said on Saturday, 29 March 2014, that President Mahama would be faced with the challenge to manage the ECOWAS integration agenda, including returning stability to Mali. But the minister explained that the president was ready for the task. Boko Haram had little contemplation then.

On the signing of the highly-flagged EPA, Ms Tetteh is reported to have stated that the Heads of State and Governments had in principle approved the agreement. But Nigeria had some specific concerns and on that score, a committee had been set up by the Heads of State and Governments, made up of Ghana, Nigeria, Cote d' Ivore and Senegal, to look at the technical issues and report back to the Heads of State in two months. So Prez Mahama holds the economic destiny of ECOWAS. How does he manage it?

On 30 September 2011 the European Commission, put forward a proposal to cease by 2014 those trade preferences extended since January 2008 via the Market Access Regulation, in the continued absence of, at least, ratified interim EPAs. Dick Toornstra[4], predicted that this initiative, intended to speed up EPA negotiations, is almost certain to rekindle interest in these agreements during 2012 and 2013. “More and more parliaments in Africa and the Pacific, as well as the European Parliament, will be confronted with ratification procedures. For these reasons, upon the depletion of original stocks of this reader (originally published in September 2011), the OPPD decided not only to reprint it, but to enhance it with a new chapter (4.8) to reflect these developments and to update other parts as required.” At the time of going to press, Prez John Mahama-led ECOWAS, faces stiff internal opposition for the EPA’s final ratification, amidst not only the said threat to regional sovereignty but also, annihilation of fragile local industries.

The European Union (EU) [5] defines Economic Partnership Agreements (EPAs) basically as trade agreements, within a multi-layer development strategy vis-à-vis African, Caribbean and Pacific (ACP) countries which also include extensive funding (European Development Fund) and other initiatives aimed at fighting poverty and underdevelopment. So it is analysed in the context of the overall EU development policy and the evolving global trade regime. But per EU, “EPAs as in Ghana have been criticised by many stakeholders both in the EU and in the ACP countries and they are often depicted as an instrument of economic penetration of the EU in Africa and the sincerity of their development goals questioned.” For most Ghanaians or those of African origins, the EPAs appear not only as neocolonial economic overreach but also geo-political strategy, designed to lure the African into colonial servitude.

Notwithstanding, on 16 April 2013, the European Parliament tempered its earlier final touchline of the beginning of 2016; by pushing forward the signing deadline, to 01 October 2014. This is raising many eyebrows particularly, in Ghana where not only homemade products are being propagated but also the Defence Industry, in Kumase, is about to be self-serving in the production of footwear and to the larger extent, generosity to other security outfits and needy school kids, thereby, breaking the traditional norm of relying on either the defence industries in the Great Britain or the Communist China. It is found [6] that EPAs are legally binding bilateral contracts between the EU and individual African countries which once signed, warrants that within a decade (10 years), about 80% of that country’s market should open to European goods and services, haunts. Although it is said that various African countries have managed to exclude a number of subsidized agricultural products and sensitive industries from the negative elements of EPA stipulated market liberalization, much remain unresolved, hence the cold feet-dragging.

But are the EPAs as bad as we think? According to the EU[4], it is important to keep in mind that EPA negotiations were launched by the EU in agreement with the ACP governments, and for two essential reasons: The trade regime adopted in the Lomé Conventions (and the subsequent Cotonou Agreement) gave non-reciprocal, preferential market access to the ACP countries but discriminated against other developing countries which did not enjoy the same preferential treatment and therefore had to pay higher custom duties for their products exported to the EU. Accordingly, it was argued that the ACP preferential trade regime was in breach of the existing rules governing international trade and the World Trade Organisation (WTO) requested that it be repealed and replaced with a WTO-consistent one.

However, Steve McDonald, Stephen Lande, and Dennis Matanda[6], argue that since the current EU approach, ostensibly, doesn’t fully consider how EPAs impact issues of global importance such as Africa’s regional integration, these negotiations can be deemed fatally flawed. “The arbitrary deadlines set are, first off, much too premature; and especially expose individual sub Saharan African countries much too susceptible to demands from third countries like those in Asia and the Americas for the kind of reciprocity afforded European suppliers. Therefore, if Africa is going to ameliorate the negative impact of EPAs, the AU must respectfully insist that deadlines, such as the October 1, 2014 one, be postponed, allowing for various prerequisites that will enable an equitable negotiated conclusion since the region will be a collective like the EU.” The bid being waged for arm-tied Africa is that this ample time and leeway should also allow the AU Members to develop consensus between themselves and all major trading partners on how best to integrate Africa into global supply chains and distribution networks.

But to paraphrase the words of Nana Akomea[7]- a former New Patriotic Party (NPP) Parliamentary and a communicator, who describes ECOWAS as useless for its inability to exploit the advantages of the open market it enjoyed from the EU to expand its economies which could have put the regional body in fair and strong competing position with EU, ECOWAS has no locus in crying over split milk or to feel threatened about its free trade deals with the EU but to stick to its part of the terms in the EPA. “It is easier to sell in Europe than in Nigeria or Cote d’Ivoire so what is the essence of ECOWAS? Leadership in ECOWAS has been useless… the only way forward for the citizens of member states is to put pressure on their leaders to form a formidable economic union to compete with the European Union,” he added. Nana Akomea deflated the ECOWAS-EU unequal bargaining or competing strengths arguments, illustrating it with a world-class 100metres runner who generously offered the amateur years to train and to have his/her starting-point at 80metres to the endpoint while he/he stands at point zero but came to complain on the day of the contest that s/he was ill-prepared and lacks the required capacity for the race.

Ms Samaia Yaba Nkrumah [8]- the Chair of the Convention People’s Party (CPP) cautions government that the EPA will cost Ghana 30 new hospitals and 40,000 jobs if it signs the agreement and that it will have a negative effect on the local manufacturing sector, as it will put a minimum of 43,000 direct jobs at risk. The Director of Communication for CPP- Nii Armah Akomfrah, reminds that the tariff revenue loss to Ghana over the full implementation period of the EPA (up to 2022) stands at a minimum of $90 million annually. The CPP quotes the Ministry of Trade and Industry’s estimate, which is $150 million annually, and the United Nations and the South Centre’s estimate, which is $374 million annually. In sum, the statement hinted that Ghana was expected to lose between US$1.12 billion and US$5.23 billion over a 14-year period. Wilsoncentre.org argues however that “to their credit and through commendable negotiation dexterity, negotiators from various African countries have managed to exclude a number of subsidized agricultural products and sensitive industries from the negative elements of EPA stipulated market liberalization. JusticeGhana provides below the time-line for the EPA and the ECOWAS [9]:

Photo Reporting


TIMELINE: The EPA and the ECOWAS

December 2007

Ivory Coast and Ghana agree Interim EPAs (IEPAs) with the EU to prevent trade disruption after the forthcoming expiry of the WTO waiver.

November 2008

Ivory Coast signs the IEPA.

December 2008

The Economic Community of West African States (ECOWAS) Heads of State and Government Summit asks the EU to take account of the development concerns of the region, notably concerning capacities and market access and on the financing of the cost of fiscal and economic adjustments of the EPA.

February 2009

The regional validation process for the West African Community Development Programme and the region's EPA Development Programme (EPADP) is launched.

May 2010

In a Council conclusion the EU Ministers of development outline their expected support to the EPADP.

March 2011

The West African summit expresses concern over the EPA deadlock due to persistent differences of opinion between the negotiating parties.

May 2011

Negotiations restart. Significant progress is made giving hope for a prompt conclusion.

November 2011

EU and West African negotiators meet in Accra, Ghana, at a technical level, from 15 to 18 November 2011, to discuss the way ahead. Progress is made in particular on the text of the draft agreement and the EPA Development Programme (PAPED), work continues on issues including market access offer.

With these in mind, not forgetting the timely and swift intervention of US and its Western Allies in the depressing situation within ECOMOG-led military-cum-political powerhouse, it is probably save, to argue that it might be unconscionable for ECOWAS to grant unconditional access to EU to enter its territories, when it is frustrated and powerless in addressing its chronic domestic ailments. After all, a friend in need is a friend indeed. ECOMOG and in general sense the Africa Union (AU), had repeatedly demonstrated how fragile and feeble they are, in fending their own internal security needs let alone prepared to withstand future “external aggression” if its core values are put to test or are forcefully challenged. What ECOWAS leadership needs now is not feet-dragging but a comprehensive legal framework that protects not only its local consumers or exporters but also, collective social policy regimes that guarantee anti-dumping rules and the future sustainability of ECOWAS and fair trade.

For example, the Office of Fair Trading (OFT) was a not-for-profit and non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, enforces both consumer protection and competition law, acting as the UK’s economic regulator [10]. The OFT’s goal is to make markets work well for consumers, ensuring vigorous competition between fair-dealing businesses and prohibiting unfair practices such as rogue trading, scams and cartels. Its role was modified and its powers changed with the Enterprise Act 2002. The OFT’s mission is to make markets work well for consumers. Markets work well, it explains, when businesses are in open, fair and vigorous competition with each other for the consumer's custom. “We pursue this goal by: encouraging businesses to comply with competition and consumer law and to improve their trading practices through self-regulation; acting decisively to stop hardcore or flagrant offenders; studying markets and recommending action where required; empowering consumers with the knowledge and skills to make informed choices and get the best value from markets.

In addition to the protection offered by OFT, not forgetting the established common law practices, in the UK, there exist statutory protection from unfair terms in the form of the Unfair Contracts Terms Act (UCTA) 1977 and the Unfair Terms in Consumer Contracts Regulations (UTCCR) 1999. The Unfair Contract Terms Act 1977 is a primary legislation whereas the Unfair Terms in Consumer Contracts Regulations is in the form of secondary legislation introduced to implement a European Directive. We mention in passing that whereas UTCCR only applies to contracts not individually negotiated, no such restriction applies in UCTA. Whereas under the UTCCRs any term is capable of amounting to an unfair term, under UCTA some terms are automatically treated as unfair. UTCCRs all terms must be shown to be unfair. UCTA applies a test of reasonableness in deciding whether terms are unfair. Accordingly, it has its own test of fairness based on dealing in good faith and balancing the rights and obligations of the parties. The Unfair Contract Terms Act goes beyond liability arising from contracts and extends to tortious liability arising from negligence or liability arising from the Occupiers Liability Act 1957 [11].

That aside, tt is worth noting that the free movement of goods as laid down by Articles 34, 35 and 36 of the Treaty on the functioning of the European Union (TFEU), preventing Member States from adopting and maintaining unjustified restrictions on intra-EU trade, is not unlimited in scope under Art 34 TFEU. For example, selling arrangements and other marketing rules- opening hours for shops, indistinctly applicable to domestic and imported goods in principle, fall outside of its scope. Additionally, the TFEU provisions do not preclude prohibitions justified on grounds of public morality, public policy or public security, the protection of health and life of humans, animals or plants, or the protection of industrial and commercial property, as well as other mandatory requirements recognised by the Court of Justice (e.g. protection of the environment). Such prohibitions must, however, remain proportionate and must not amount to arbitrary discrimination or a disguised restriction on trade between Member States [12].

CONCLUSION

I have strove to show that accepting EPAs might not be as terrifying as Chinese-led galamsey incursions in Ghana as honest or fraudulent competition, exist among all human societies and nations. We must be measured therefore, in “our neo-colonial and imperial suspicions and historical worries when evaluating the economic and political efficacy of the EPAs. Unlike the Nigeria debacle, we respectfully ask Prez Mahama and ECOWAS to act swiftly on the EPAs. Our preoccupation is to make sure that legally, we have much access and fairness across all the crucial sectors of EU marketplace. After all; what profits ECOWAS if economically it barricades all its trade frontiers and perishes in the hands of Boko Harams?

Asante Fordjour authored this commentary

JusticeGhana

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References

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