Mar 11, 1992
GATT CALLS FOR MORE MARKET OPENING TO ASSIST GHANA.GENEVA, MARCH 10 (CHEE YOKE HEONG/TWN) – A more liberal world trading system is needed to complement Ghana's liberation moves if the country's economy is to enjoy the fruits of its reforms, says the General Agreement of Tariffs and Trade (GATT) secretariat.Ghana embarked on a series of structural adjustment programmes, beginning with the launching of the Economic Recovery Programme (ERP) in 1983 to halt the decline of the economy since the 1970's. The reforms included adopting market-opening measures, which have speeded up Ghana's integration into the world economy and further strengthened Ghana's reliance on the multilateral trading system, particularly for markets for its exports. The GATT Council which ended its two-day discussions Tuesday of Ghana's trade policies, under the Trade Policy Review mechanism praised the "sweeping reforms" undertaken by Ghana in adopting a more "outward-oriented" economic programme. The review, however, warned that the establishment of the single market European Community (EC) would lead to a loss of Ghana's preferential position under the Lome Convention, and that a more liberalised and open-multilateral trading system under the Uruguay Round was necessary for Ghana's future. The Lome Convention is an agreement between the EC and a number of the African, Caribbean and Pacific (ACP) countries, allowing among other things, duty-free access of products from these countries into the Community. Ghanaian exports of cocoa, the country's major export, and other important agricultural commodities receive preferential access to the EC under the Convention. The EC accounts for around half of Ghana's trade and the percentage has increased substantially in the last decade while the trade share of the U.S. declines. Overall, developed countries account for over three-quarters of Ghana's exports and imports. "It is therefore, important that Ghana's trading partners assume their responsibility for assisting Ghana's autonomous liberalisation process by ensuring market access and stable trading conditions for its developing export base", GATT said. In its report to the GATT Council, the Ghanaian government pointed out that since 1983 when Ghana began to transform its economy into an "outward-oriented" economy, the country is now more vulnerable to adverse trends in the international economic system, particularly the uncertainties and slump in the commodity prices and the deteriorating terms of trade. It expressed its concern over Ghana's narrow export-base and high dependence on the commodity exports, especially of cocoa, timber and mineral products. According to the report, Ghana's term of trade has cumulatively deteriorated by more than 30 per cent between the 1988-1990 period. This was mainly due to declines in world prices for Ghana's cocoa and gold and the steep increase in oil prices in 1990. The weakening of the world prices for cocoa, which is the major export for Ghana has affected its export earnings. Between 1987 and 1990, earnings increased on average 2.5 per cent compared to about 20 per cent during the preceding years. Consequently, Ghana hope to secure better access to the international markets particularly for tropical products and further strengthening of the GATT-based multilateral trading system through the Uruguay Round to assist the country's efforts to diversify away from commodity-based exports and to secure stable markets for its exports. The Trade Policy Reviews conducted by the GATT started in 1989. As part of the review mechanism, the GATT secretariat produces an evaluation of trade related policies of individual GATT members. The country under review then comments on the report before the matter is debated by the GATT Council.