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WTO members review regional trade agreements covering EU, Ghana and EAEU

WTO members review regional trade agreements covering EU, Ghana and EAEU
Photo credit: Dominic Chavez | World Bank

22 Nov 2018

WTO members reviewed the interim Economic Partnership Agreement between the European Union (EU) and Ghana at the meeting of the Committee on Regional Trade Agreements on 19 November 2018.

Members also considered the Eurasian Economic Union (EAEU) treaty and EAEU accessions of Armenia and the Kyrgyz Republic.

Parties to the EU-Ghana interim Economic Partnership Agreement (EPA) spoke of the growth in trade since the Agreement, which liberalizes trade in goods, entered into force on 15 December 2016. The EU eliminated almost all tariffs immediately upon entry into force of the Agreement, while Ghana will eliminate 78% of its tariff lines by 2022.

The Agreement also has provisions on financial and non-financial cooperation. Development cooperation and support for implementation of the EPA is provided under the Cotonou Agreement, which the EU described as an agreement responsible for laying down the framework for its relationship with countries from Africa, the Caribbean and the Pacific (ACP).

The EU said it was the top destination for Ghana's exports and the second-largest source of imports. Ghana further noted that the EU was its largest source of foreign direct investment. The Agreement was crucial for Ghana’s goal of diversifying the type of products it exports and increasing their value-added content. The long-standing relationship between the two parties is gradually evolving from a focus on developmental assistance to a stronger focus on trade and investment, Ghana said.

Members commenting on the EPA sought more information on safeguard exemptions and technical regulations and trade facilitation efforts. The EPA was further lauded for eliminating tariffs to the benefit of economic growth and regional integration.

Improving transparency

The chair of the Committee, Ambassador Julian Braithwaite (United Kingdom), told members that 79 RTAs currently in force have not been notified to the WTO as of 12 November, acknowledging that the document makes reference to a forthcoming communication on some of the agreements on the list involving members of the Latin American Integration Association (LAIA). Members continue to debate whether and how to notify certain LAIA agreements. A number of members also raised questions about the consideration of the Gulf Cooperation Council Agreement and asked GCC members to provide a clear timeline on when responses to questions could be expected.

The chair further noted that factual presentations for 29 RTAs involving only WTO members and those for a further 25 RTAs involving non-members remain pending, counting goods and services agreements separately. "End of implementation" reports were likewise due for 141 RTAs; however, none have been received in 2018. A number of members took the floor to raise concern over the continuing backlog of work and lack of notifications.

The WTO Secretariat again called on members to submit data and comments in a timely fashion. It also provided details of technical assistance activities in 2018 and those scheduled for 2019.


Factual presentation: Economic Partnership Agreement between the European Union and Ghana

Report by the WTO Secretariat

The Interim Economic Partnership Agreement (EPA) between the European Union (EU) and Ghana is the EU’s 40th RTA and Ghana’s 3rd RTA as notified to the WTO. The economies of the Parties are considerably different in terms of size and share of global trade.

With a GDP in 2016 of 14,905 billion Euros (US$16,408 billion), the EU was the world’s second largest trader of merchandise (excluding intra-EU trade), while Ghana had a GDP of US$43,264 million and was the world’s 53rd largest exporter and 61st largest importer of merchandise (excluding intra-EU trade).

The EU was, in 2016, Ghana’s largest source of imports (accounting for 31.2% of its imports), and 4th largest export market (accounting for 13.3% of its exports). For the EU, Ghana was the 57th largest source of imports (accounting for 0.13% of its imports) and 54th largest export market (accounting for 0.16% of its exports).

The Parties’ composition of trade is also significantly different. The EU’s exports and imports consist mainly of manufactured products (80.5% of exports and 65.8% of its imports), while Ghana’s main exports consist of agricultural products (31.7%) and fuels and mining products (28%), while its imports mainly consist of manufactured products (63.1%); other commodities and transactions not classified elsewhere also account for a large share of Ghana’s exports (31.5%) and imports (23.3%). The EU’s trade to GDP ratio for the period 2014-2016 was 16.8, while Ghana’s was 44.2.

In terms of bilateral merchandise trade between the Parties as well as their global trade for the period 2000-2016, both Parties have had global trade deficits for much of this period. The EU’s balance of trade has been positive for more recent years since 2013 while Ghana had a trade surplus in 2014 and 2015. In their bilateral trade, the EU has had a small surplus for most of the period.

During the period 2013-2015, on the basis of Harmonized System (HS) Sections, Ghana’s imports from the EU reflect the overall structure of EU exports to the world, with machinery, transport equipment and chemicals forming the three largest EU export categories (56.2% of its global exports in 2013-2015), and the three largest categories of imports by Ghana from the EU (57.8% of Ghana’s imports from the EU).

The EU’s main imports from Ghana were minerals and prepared foods which accounted for 86.6% of its imports from Ghana; the two categories were also among Ghana’s largest export categories (43.7% of its global exports) although precious stones, at 38.3% of its exports was Ghana’s largest export category.

Characteristic elements of the Agreement

The Agreement was signed by the Parties on 28 July 2016 and provisionally applied since 15 December 2016. It was notified to the WTO on 3 April 2017 under Article XXIV:7 of the GATT 1994 and its Understanding. The text of the Agreement along with its Annexes is available here:

pdf Stepping Stone Economic Partnership Agreement between Ghana and the European Community - 21 October 2016 (2.30 MB)

The Agreement aims to allow Ghana to benefit from enhanced market access to the EU within the framework of the EPA negotiations, while awaiting the conclusion of the full EPA; establish the grounds for negotiation of an EPA that contributes to poverty reduction, promote regional integration, economic cooperation and good governance in West Africa and improve West African capacities in trade policy and trade related issues; promote the harmonious and gradual integration of Ghana into the world economy according to its political choices and its development priorities; strengthen the existing links between the Parties on the basis of solidarity and mutual interest; and create an agreement that is compatible with GATT Article XXIV.

The Agreement contains seven Titles, and various appendices and annexes, as well as a Protocol on mutual administrative assistance in customs matters, all of which form an integral part of the Agreement. Title II (Partnership for Development) calls for development cooperation and development finance cooperation to support the implementation of the Agreement; foster an improvement to the business climate; support the implementation of rules; promote the upgrading of productive sectors in Ghana; and cooperate on financial adjustment and in international fora.

As the Agreement is an interim agreement, Article 71 notes that the Parties will continue negotiations according to the provisions of the Agreement. When negotiations are complete, the resulting draft amendments shall be submitted for approval to the relevant authorities. Moreover, the Agreement will be superseded by a global EPA concluded at the regional level with the EU at its entry into force (Article 75). Given that negotiations are continuing, the date of full implementation of the Agreement (envisaged for 31 December 2022 in the Agreement) may be subject to change.