Ghana’s Costly Wait for Post-Brexit Deal With U.K.: Supply Lines

ACCRA (Capital Markets in Africa) — The first consignment of Ghanaian shipments to the U.K. to face post-Brexit tariffs docked at Portsmouth last night, including 185 metric tons of bananas, the majority of which were so-called Fairtrade.

Because Britain and the European Union reached a trade deal so close to the divorce transition deadline of Dec. 31, some other “continuity” deals — those intended to roll over the terms of trade the U.K. enjoyed as a member of the EU — still hang in the balance. Agreements with Albania, Algeria and Serbia are also outstanding.

While they wait, their exports face Britain’s Generalised Scheme of Preferences, which applies import duties at reduced rates on developing countries.

Last night’s tariff amounted to more than £17,500 ($24,000), no meager sum for Golden Exotics, the banana producer in Accra behind the shipment. The company is the only source of work in a 30-mile radius for the 3,000 people it employs.

The U.K. Department for International Trade pointed only to its New Year’s Eve statement that the two sides had “reached a consensus on the main elements” of a deal, and that the text would be finalized in weeks.

However, George Kporye, Golden Exotics’ administration manager, added that the tariffs should be waived in the interim and the deal concluded in days, rather than weeks. “We had to reduce the volumes because of the uncertainties of reaching a deal on time,” he said.

Official data show Britain’s exports to Ghana were worth £722 million in 2019, with imports — primarily oil, fish, cocoa and fruit — totaling £498 million.

Ian Mitchell, senior policy fellow at the Center for Global Development, said that while London managed to roll over most of its trade deals, ministers “underestimated the complexities in Ghana.”
Gareth Thomas, a member of the U.K. parliament and shadow international trade minister, said saving jobs at the low-margin businesses such as Kporye’s that export to Britain should be a priority, adding: “It beggars belief that they left sorting out a deal with a key Commonwealth ally so late.”

Charted Territory
Spain and the U.K. struck a last-minute deal over Gibraltar that eases access to the territory and removes the threat of fresh restrictions at the border. Responsibility for overseeing the new passport-free Schengen agreement terms for entry to Gibraltar’s port and airport, as envisaged in the accord, would be Spain’s, according to Spanish Foreign Minister Arancha Gonzalez Laya.

On the mend | Euro-area manufacturing grew at the fastest pace in more than 2 1/2 years in December, bringing some positive news at the end of a horrific 2020 for the region’s economy.
New levies | The Trump administration imposed tariffs on additional products from the EU as part of a long-running dispute over subsidies to aircraft makers Airbus and Boeing.

Africa trade deal | The first goods began to flow under an Africa-wide free-trade pact, the culmination of more than five years of negotiations on cutting cross-border tariffs.

Not wanted | The New York Stock Exchange will delist three Chinese corporations to comply with a U.S. executive order that imposed restrictions on firms with ties to the Chinese military, a primarily symbolic blow amid heightened geopolitical friction between Washington and Beijing. Chinese oil majors may be next in line.

EU-China pact | The EU and China announced the political approval of an agreement to open the Chinese market further to EU investors, marking a major step in talks that began in 2013.

Easier investment | China relaxed foreign investment rules for its southern free trade port of Hainan island, allowing overseas funds into sectors such as mining, online trading, and market and social research.

Source: Bloomberg Business News