The UK government announced a new Interim Ghana-UK Trade Partnership Agreement on 4 February, a move welcomed by the Fairtrade Foundation.
Without a trade agreement, Ghanaian producers faced import duties under the UK’s Generalised Scheme of Preferences, which applies tariffs at reduced rates on developing countries. Ghana’s exports to Britain were worth £498m in 2019.
The Fairtrade Foundation warned that if tariffs continued, farmers and workers would lose market access, affecting the viability of many businesses, including some cocoa co-operatives. Furthermore, the Foundation believed that buyers could have switched their supply to other countries of origin, leading to job losses in Ghana.
According to the Foundation, Fairtrade bananas imported since 1 January have been taxed at the rate of 9.5p/kg, where previously no tariff applied. The typical price in the supermarket is 73p/kg and so the tariff represented a massive additional cost for a product already sold at very low margins, added the Foundation.
According to the UK government, the new trade agreement will provide for duty-free and quota-free access for Ghana to the UK market and preferential tariff reductions for UK exporters to the Ghanaian market.
Tim Aldred, head of policy at the Fairtrade Foundation, said: “We are pleased to see news that a trade deal has been agreed between the UK and Ghana. This has been a major concern for Fairtrade banana sales from Ghana due to the damaging tariffs that had come into effect, and there will be relief amongst Fairtrade farmers and workers that this serious and immediate risk to jobs and livelihoods has been addressed.
“We look forward to seeing the detail of the agreement, and the timetable for the restoration of tariff free trade. We are keen to see a trade relationship, which supports fair and sustainable trade, for the benefit of Ghana and the UK. We will be looking for a deal consistent with regional trade integration so that Ghana is supported in building up markets closer to home as well as further afield.
“We welcome the work done by the UK to agree the vast majority of continuity agreements with lower income countries. The situation faced by Ghanaian farmers in the past month emphasises how important these agreements are to the jobs and wellbeing of ordinary people all around the world. As the UK continues to move forward with new trade deals, it is vital that poverty reduction, environmental sustainability and human rights are placed front and centre of our trade policy goals.”