‘Sign agreement with UK to guarantee trade after Brexit’

Some private companies operating in the country have appealed to the government to, as a matter of urgency, sign a bilateral trade agreement with the United Kingdom (UK) to guarantee existing trade relations between the two countries in an event of Brexit.

The companies are Blue Skies, which is into fresh fruit production, based at Nsawam, and Golden Exotics, which is also into banana cultivation and export, based at Asutsuare, both in the Eastern Region.

The Managing Director of Golden Exotics, Mr Benedict Rich, said the company would have no option but to shut down its operations in Ghana if the government failed to reach an agreement with the UK in an event of “a No-deal Brexit.”

“If there is no deal on Brexit, or an agreement in place, importers in the UK will automatically charge €114 per

tonne of the banana, which is about €2 per box that we export.

“To put it into perspective, €114 additional charge will turn a profit into a loss for us and we will have no option but to fold up our operations in Ghana,” he stated.

Mr Rich was speaking in an interview with journalists during a tour of the company’s plantation at Asutsuare last Monday.

Agreement

Ghana signed an interim Economic Partnership Agreement (EPA) with the EU, which allows the export of goods to EU  member countries, including the UK, quota-free, and without payment of tariffs.

With Brexit, companies in Ghana which depend on the UK market to sell their products could be affected significantly, because the UK will no more be part of the EU.

The fear is that exports to the UK market could now attract tariffs and quantities of exports to their market could also be restricted.

Ghana will, therefore, not have any trade agreement with the UK in such an event, and without the tariff exemptions under the EPA, goods from Ghana will become expensive and uncompetitive in the UK.

COMESA

To avoid disruption in trade in an event of a no-deal Brexit, countries such as those under the Common Market for Eastern and Southern Africa (COMESA), made up of 21 countries, including Kenya, Egypt, Ethiopia and Rwanda, signed an agreement with the UK to enjoy some trade concessions just as they enjoy under the EPA.

“This is not to say these countries like the agreement and I am sure they want to renegotiate it, but they signed it to  temporary stop the chaos that a No-deal Brexit will bring.

“They have agreed that the existing agreement should be rolled over for now for more negotiations in the future,” Mr Rich added.

The Corporate Affairs Manager of Golden Exotics, Mr George Kporye, also said: “We know a lot is being done in the  background but we appeal to the government to bring clarity to the issue quickly so that we will not be caught off guard when Brexit finally happens,” he said.

Job losses

Blue Skies employs more than 3,500 workers, while Golden Exotics also engages about 3,000 workers.

The two companies constitute part of the biggest employers in the private sector in the country.

Golden Exotics exports about 70,000 tonnes of banana each year, with 55 per cent of its products going to the UK market, while Blue Skies also exports about 60 per cent of its products to the UK.

Mr Rich explained that the company’s clients in the UK have already prepared its orders for 2020 based on the €114  tariff.

For his part, the Chairman of Blue Skies, Mr Anthony Pile, said any delay on the side of the government in signing the  interim agreement with the UK would spell doom for companies that depended on the UK market.

“We desperately need the interim EPA to be in place in case Brexit happens with no agreement, so that we can go on to export products from Ghana to the UK,” he said in an interaction with the Minister of Trade and Industry,  Mr Alan Kyerematen, during his visit to the company earlier last Friday.

Britain voted to exit the European Union last two years, ‘Brexit’. And when the UK finally ceases to be a member of the  EU, protocols relating to the free movement of people, goods, services and capital will be affected by that decision.  

Background

Even though the format of Brexit is yet to be decided, the Prime Minister of the UK, Mr Boris Johnson, has expressed his determination to leave the Union with or without a deal with the EU, hence the uneasy calm among local companies which export to the UK market under the EPA.

In August, 2018, the then UK Minister for Africa, Ms Harriet Baldwin, told the Daily Graphic that the UK and Ghana were exploring the possibility of rolling over the EPA as an interim trade agreement between the two countries post Brexit.

“We have arrangements with Ghana through the EU that give the country very good access to the UK. Obviously, we are planning to, as an interim measure, continue with that approach and use that as the basis to make the political commitment to improve on the trading arrangements between the two countries,” she said.

President Nana Addo Dankwa Akufo-Addo has also assured the business community of the government’s efforts to ensure that Brexit will not affect the country’s trade with the UK.

“We are expectant that the outcome of the negotiations, contrary to the negative opinions of some so-called economic

experts, will not disturb our solid trade cooperation with the UK,” he said at the Third UK-Ghana Investment Summit in Accra in October 2018.