TRADE POLICY REVIEW OF GHANA
May 26, 2014
Thank you, Chair.
The United States is pleased to welcome the Ghanaian delegation here today for the government’s fourth WTO Trade Policy Review. We would also like to thank the government and the Secretariat for their reports circulated before this meeting. Finally, we would like to thank our discussant, Ambassador Wiboonlasana Ruamraksa, for her contribution to this process and her insights into Ghana’s trade policy in the context of its economic development.
Ghana is an important and growing trading partner of the United States, and it continues to benefit from U.S. trade preference programs. In 2013, U.S. duty-free imports from Ghana under the African Growth and Opportunity Act (AGOA) and the U.S. Generalized System of Preferences (GSP) totaled $34.7 million. Such imports included a number of value-added cocoa products, apparel, baskets, and wood products.
Since Ghana’s last review, the government has pursued robust economic reforms. Its macroeconomic fundamentals, nonetheless, remain challenging, with fiscal deficits, increased inflation, and currency depreciation complicating macroeconomic stability. We are interested to hear Ghana’s plans to address the policy challenges in the near-term to help restore macroeconomic stability. Among the steps the government is taking to deal with the expanded budget deficit are higher taxes, especially on trade. The Secretariat indicates that the share of taxes on international trade has risen to four percent of GDP and to over a third of fiscal revenue. We hope that Ghana will explain during this review why it seems to rely heavily on high external taxes and other duties and charges for revenue purposes, and how Ghana views this policy as contributing towards its development aspirations. Can Ghana provide reassurances that it plans to use these additional revenues to finance growth-enhancing infrastructure and trade capacity building rather than further increases in the public sector wage bill?
In recent years, Ghana has been fortunate to discover significant oil and gas reserves, and is moving to develop a process to invest these resources in a way that promotes overall economic growth and benefits for the Ghanaian people as a whole. How this process unfolds will have a major, long-term impact on Ghana’s growth. Downstream oil and gas value-added processing offers scope for expanded industrial production and growth. As Ghana seeks to use its oil and gas reserves, it is important to avoid counterproductive policies, such as local content requirements, that distort trade, limit foreign investment and participation in this sector, and create non-competitive companies. Unfortunately, in November 2013, Ghana passed a law requiring ninety percent local content in the oil and gas sector by 2023. We hope that the government will reconsider this choice and eliminate this requirement.
Ghana has begun to show stronger support for public-private partnerships, and it has made progress since its last TPR to encourage foreign direct investment and private sector growth. The government also has taken new steps to encourage the foundation and growth of small and medium enterprises through its National Board for Small Scale Industries. We also hope that Ghana will continue to make progress on removing gender-based impediments so that women entrepreneurs, farmers, and business-owners can fully participate in global trade.
We note that there have been frequent tariff rate modifications since Ghana’s last TPR, and we are concerned by the Secretariat’s statement that “Ghana’s adoption of the ECOWAS Tariff would bring considerable changes to Ghana’s tariff structure,” and, in particular, that “seven of the WTO tariff categories would record tariff increases, in some cases by a large margin.” We encourage Ghana to work with ECOWAS to lower tariffs, not raise them. Very few of Ghana’s non-agricultural tariff lines – only one percent – are bound, but we hope that Ghana will reassure Members today that it will undertake not to break any of its existing WTO tariff bindings as a result of these tariff increases. If Ghana is breaking any tariff bindings as a result of its ECOWAS commitments, we ask that it explain during this review how it expects to bring its tariff policy back in line with its WTO commitments. Ghana also appears to maintain a long list of products that require licenses prior to and as a condition of importation. Finally, the government seems to be blocking imports of certain agricultural products, including poultry and rice, through the use of import licenses and quotas. In light of Ghana’s steps toward trade liberalization, we hope that Ghana will reassess and bear in mind its economic development objectives and WTO obligations when creating and implementing its trade policy.
The lack of adequate and effective protection of intellectual property rights (IPR) continues to be a U.S. concern. There is little government-initiated enforcement. Ghana’s Copyright Office periodically has initiated raids in pursuit of pirated works, and Ghana’s Customs Service has collaborated with concerned companies to inspect import shipments. We urge the Ghanaian government to continue to strengthen its protection and enforcement of IPR, including through better coordination of its enforcement agencies, development of a national strategy on IPR protection, public outreach and education on the importance of IPR to Ghana’s economic growth, and by being regionally proactive in promoting IPR protection and enforcement.
Over the last five years, U.S. trade capacity-building assistance in Ghana totaled $38 million. USAID’s West Africa Trade Hub is based in Accra, Ghana and focuses on improved management and governance of West Africa trade corridors, including those emanating from Ghana’s port in Tema, to link trade and customs information, stimulate export development, and address critical sanitary and phytosanitary (SPS) issues. USAID, in partnership with the Borderless Alliance, has also worked to establish Border Information Centers (BIC) to provide information and assistance to traders, which have proven successful in simplifying procedures and reducing delays for traders. There are numerous centers around the region, including centers focused on the Ghana-Togo border and the Ghana-Burkina Faso border. USAID is also working on programs aimed at enhancing the competitiveness of agricultural firms in domestic, regional, and international markets, as well as strengthening management of the oil and gas sector.
The United States welcomes the steps that Ghana has taken to improve its economic governance and to liberalize its trade regime. We look forward to continued work with Ghana, both bilaterally and within the WTO. We especially hope to work closely with Ghana in implementing the WTO Trade Facilitation Agreement, recognizing the considerable benefits that will accrue to countries like Ghana.
In closing, the United States greatly appreciates the opportunity to participate in this review of Ghana’s trade policy regime and looks forward to continuing our dialogue with your government.