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Opinions of Thursday, 10 November 2005

Columnist: Frempong, Kwadwo

Why Nigeria?s ban of Ghana?s exports was illegal.

Early this year Nigeria placed a ban on the importation of certain products into the country as part of measures to stop the importation of cheap items and ultimately to diversify the Nigerian economy. Concerning the latter?s outlaw of 96 Ghanaian products from its market a large number of Ghanaian industries have been affected by the ban, which applied to all Ghanaian exports to Nigeria except salt.

Dr Kofi Konadu Apraku, Ghana's Minister of Regional Cooperation and NEPAD, told the Ghana News Agency that the Ministry was working in consultation with the Ministry of Trade and Industry to fashion out a strategy to address the situation.

He said Ghana was studying the matter closely in the light of firm cooperation between the two countries. Under the ECOWAS Trade Liberalization Treaty, member countries are free to export and import items into each other's country devoid of quotas or any forms of restriction.

The minister can?t be far from right but the actions of the Nigerian government and reaction of the Ghana side and Ghanaian local industry Chiefs baffles me. Its right to say that as neighbours and facing a bigger and stronger economy as Nigeria, you need to be avoiding trade war due to its effects on your economy. I see Nigeria?s excuse of preventing cheap products and diversifying as cheap noises and passing the buck and its own responsibility.

First the Nigerian Government like any other, should set up local institutions like a standards Board or agency to check products or imports to make sure they meet the standards if they have one. If its very difficult to do, the worse case scenario will be what the US has done to automobile from Japan and South Korea. The rule is, yes you can bring in your cars etc but one-third of the parts should come from US market. Here you know how good your local materials are or can be and that will truly ensure good and effective balance in production. Other than this you do inter country checks and inspections on production locations etc.

The actions taken by Nigeria were wrong ,harsh and very disrespectful and an arrogant show of power and influence in the sub region. I have tried to explain why they were wrong in the simplest of terms and suggest solutions and viable alternatives.

The governments of Nigeria like any other West African country that is signatory to the ECOWAS Trade Protocol, the COTONOU agreement which will be EU-ACP partnership Agreement from December 2007, as well as the WTO protocol should have known the consequences to its economy before signing them. I have always reiterated the fact that developing countries should build their technical expertise and invest more in trade negotiations, planning and formulation. Moreover, the implementation of Economic Partnership Agreements (EPAs )will impose severe challenges on ACP countries, such as: how to manage the expected losses of fiscal revenue in some ACP countries; how to cope with increased competition expected to arise from reciprocal trade; how to ascertain net benefits from the EPAs, especially in least developed countries (LDCs) that already benefit from the non reciprocal ?Everything-But-Arms?(EBA) provisions; how to deal with limited negotiating capacity, because EPAs negotiations will stretch the already limited resources in ACP countries; and how to ensure consistency between the EPAs and Doha Work Programme (DWP) negotiations. I want to first state the clauses that Nigeria has violated in every sense in banning products from its market.

Countries in the West African region enjoys unrestricted market access. Under the GATT Article XXIV paragraph 8 its required that tariffs and other restrictive regulations of Commerce (ORRCs) on substantially all the trade between parties to a free trade area be eliminated. I have to say that the only loophole in the above clause is that there is no agreement in the WTO on the scope of these systemic issues. The first point that I have to make is all trade agreements must be WTO compliant. This makes what ever agreement or actions taken to be in conformity with clauses and agreements in the WTO.

Secondly under the Cotonou Agreement which Nigeria and Ghana are signatories, Article 96, and its rarely used sister Article 97, are easily the most controversial articles in the Cotonou Partnership Agreement. They provide the legal basis for the suspension of the Cotonou Agreement in cases where one of the parties feels that the agreement's essential and fundamental elements are not being respected. The articles are therefore inevitably linked to some form of disagreement or breakdown in relations between signatory parties. Yet, the inclusion of these articles in the Cotonou Agreement is not surprising: breakdown clauses, describing what to do when parties no longer agree on the way forward, are common currency in contracts and memoranda of agreement.

What I thought was a very unreasonable stance, maybe diplomatic but at the end very cowardly was the reaction of the Ghanaian officialdom. After a period of negotiations and diplomatic contacts, Nigeria demanded a list of products the Ghanaian government wanted to be allowed to be given market access.

Some members of the Nigeria Chamber of Commerce, said it was the contention of the Nigerian authorities that Ghana has ?over-liberalised its markets, making it a fertile dumping ground for cheap imports from Europe and Asia?.

Speaking to press its alleged some of the officials had said it was the belief of the Nigerian authorities that Ghana attracts cheap imports from Asia because it is seen as an easy gateway, with Nigeria being the final destination for these cheap products. They said that Nigeria would want Ghana to enforce tighter control over its market to prevent an influx of cheap products swamping its domestic market. This statements to me is unacceptable reason to place a ban. it?s the responsibility of various governments to avoid bad and cheap products through strong and effective trade institutions not arbitrary bans.

Nigeria could have been sanctioned by WTO and ECOWAS is this issue was reported by Ghana and rightly so.

The Ghana National Chamber of Commerce and Industry, which is the umbrella body for Ghanaian businesses, was accordingly charged by the Trade and Industry Ministry to compile the list of Ghanaian manufacturers for onward submission to the Nigerian authorities for action, by the end of this week. Checks at the Chamber on Friday revealed that officials had already put together the first list of fifteen companies and their products to be submitted to the Government by the deadline.

Kwasi Abeasi, Chief Executive of the African Business Roundtable, told The Statesman that Nigeria could afford to show such adamancy on this issue because the country does not subscribe to the World Bank, which gives it greater flexibility to determine which products enter its market. Ghana, on the other hand, is less free to exercise such discretion because of the checks placed on it by the Bretton Woods Institutions.

For me if Mr Abeasi made such remarks then am sad and sorry for such high ignorance and it?s a let done. I have always advocated the need for our local trade officials both government and Private sector to be abreast with new rules and protocols in trade so they can take advantage of the advantages and openings in international trade and what globalisation offers to developing countries.

Nigeria?s request for a list of products to be granted market access or preferences to me is jumping the gun and implementing a proposal as part of the negotiation agenda for the WTO ministerial in Hong Kong in December called the JULY PACKAGES agreed in Geneva in July 2004 as a preliminary agency for negotiations on market access. The proposal said special products from developing countries will be given preferential market access to all markets if it is tied to development and sustainability of the economies of developing countries and livelihoods. Why Nigeria will adopt an unsigned proposal and ignore signed ones baffle any imaginations. Why the Ghana officials accept this order was a very serious surprise for all trade experts in international circles.

It is of great admiration that Ghana avoided trade war but of course we need to be robust in resisting attempts at derailing our economy and ensuring we play a very influential role in functioning trade rules in Africa and the world over, an issue I will revisit .

Africa needs more intra-trade and not pettiness and unnecessary jungle tactics after we have signed agreements. It exposes us to ridicule for not knowing the rules but signing them . I hope we all put this behind us now that the ban has been lifted temporarily.

Mr Kwadwo Frempong,
Trade Policy Analyst,
Columnist


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