Summary
Two weeks after the conclusion of UK-Ghana trade agreement negotiations, Ghanaian exporters continue to face UK import tariffs. It took the UK government only two days to ensure duty-free access for Cameroonian exports following the conclusion of the negotiations at the end of December 2020. The restoration of Ghanaian duty-free access on a transitional basis, pending formal signing, would appear appropriate, particularly since this is allowed for in the formal provisions of the concluded agreement. It remains a mystery as to why the UK government has not taken all necessary steps to ensure Ghana’s duty-free access was immediately restored following the conclusion of the negotiation process.
With the 7th week of standard MFN tariffs of £95/tonne being applied to Ghanaian banana exports to the UK approaching, the UK government has still taken no steps to restore Ghana’s duty-free access to the UK market.
In response to questioning from the shadow Trade spokesperson requesting the UK government to ‘publish a timetable for the full restoration of tariff free trade between Ghana and the UK’, Mr Ranil Jayawardena on behalf of the government, reiterated the need for ‘a number of internal processes… to take place on both sides to allow the terms of the agreement to be applied’ and indicated both sides were working at pace to ‘allow the terms of the agreement to be applied’ (1).
The response on the 11 February 2021, thus provided no indication of when duty free access for Ghanaian exports would be restored, despite the substantive negotiations having been concluded the previous week.
The reference to the need to complete ‘a number of internal processes’ before the agreement could enter into effect is a particular source of concern. This needs to be seen in the context of the need for the Ghanaian Trade Minister to be confirmed by parliament before international trade agreement can be signed, and the current closure of the Ghanaian Parliament following a Covid-19 outbreak in the parliament.
| Comment and Analysis This Covid-19 situation in Ghana gives added urgency to the need for the governments of Ghana and the UK to complete an exchange of letters which would allow Ghana to benefit from the ‘bridging mechanism’; which would restore immediately duty-free access. This would be wholly in line with the treatment accorded Cameroon, where within a matter of days after the conclusion of substantive negotiations, the ‘bridging mechanism’ entered into effect, despite this being in the middle of the holiday period. Such a move would also be consistent with the provisions of the concluded Ghana-UK trade agreement, which allows Ghana and the United Kingdom to ‘take measures to apply this Agreement, in whole or in part, before provisional application’. Unfortunately, not only was Ghana excluded from the updated list of countries eligible for duty free access through the ‘bridging mechanism’ arrangement (last updated 8th February 2021) (2), but the 11 February UK Parliamentary response also made no reference to this option of applying the ‘bridging mechanism’ in order to immediately restore Ghana’s duty-free access to the UK market. It is unclear why the UK government is dragging its feet in this area. This may relate to Ghanaian efforts to secure a commitment to reimbursing the import tariffs applied since 1st January 2021. In which case, the two issues of reinstating duty-free access and compensating Fairtrade producers for trade disruptions need to be separated. This needs to be seen in a context where, by 21 February 2021 the import tariffs applied to Ghanaian Fairtrade bananas will have reach £175,000, an amount equivalent to almost 12% of the annual Fairtrade premium paid to Ghanaian banana producers. While Trade Minister Jayawardena response indicated a profound reluctance to contemplate any tariff reimbursement mechanism, asserting ‘the correct tariff treatment’ was being applied (1), it would appear appropriate for a mechanism be found to restore the market position of Ghanaian Fairtrade banana exporters. This could potentially take the form of UK government official development assistance to the conversion of Ghanaian banana farms to organic products, given the strong consumer trend in favour of dual certified Fairtrade/organic bananas. |
Sources
(1) UK Parliament, ‘Trade Agreements: Ghana, Question for Department for International Trade’, UIN 149722, tabled on 5 February 2021
https://questions-statements.parliament.uk/written-questions/detail/2021-02-05/149722
(2) gov.uk, ‘UK trade agreements with non-EU countries’, Published 29 January 2020, Last updated 8 February 2021
https://www.gov.uk/guidance/uk-trade-agreements-with-non-eu-countries