Cement importation from sub-region violates WTO rules

Cement manufacturers have called on government to check unfair trade practices in the country’s cement market.

The Cement Manufacturers Association of Ghana (CMAG) has consistently indicated that its advocacy for protecting the local cement industry is not to stop competition, but rather a crusade against the unfair trade practices surrounding competition which undermine the local industry’s stability or is likely to retard the establishment of a domestic industry.

In an interview with Chairman of the Association Rev. Dr. George Dawson-Ahmoah, he cited instances of importation of bagged cement from Nigeria under the guise of the ECOWAS Trade Liberalisation Scheme (ETLS), which is disturbing pricing in the market and therefore affecting the production utilisation of heavily invested cement industries in Ghana.

Rev. Dr. Dawson-Ahmoah was quick to endorse the ECOWAS protocol under which these importations are made, but highlighted certain regulations governing the world Trade Organisation which this practice violates and must be investigated, and the necessary safeguard measures put in place to protect the local cement industry.

Trade practices such as clear evidence of dumping, export subsidies, neglect of adequate local installed capacities have characterized this ECOWAS trading and therefore become a threat of serious injury to the domestic cement manufacturers.

“Cement importation from Nigeria is clear dumping by World Trade Organisation definition,” declares the Chairman, explaining that “the product has been dumped due to the fact that export price of the product is less than its normal value in the exporting country, Nigeria; and this effect of dumping the product is causing material injury to the domestic cement producer which is producing a like competitive product.”

Besides the dumping practice, the outspoken Chairman cited a possible instance where the Nigeria-bound cement imported into Ghana is – through the effects of a subsidy (Export Expansion Grant) – also causing or threatening to cause material injury or material retardation in establishing a domestic cement industry. This obviously will require countervailing duty.

Rev. Dr. Dawson-Ahmoah was speaking at the just-ended Annual General Meeting of the Association of Ghana Industries, Tema branch where he was re-elected as the chairman. He indicated that the current installed production capacities of local cement producers is over 12 million tonnes as against an average consumption of about 5.4 million tonnes, which shows surplus capacity; therefore, by WTO rules, increased imported quantities in absolute or relative terms to domestic production tend to cause serious injury, or threaten to cause serious injury, to a domestic producer – hence an imposition of a safeguard measure.

He further reiterated that competition must be fair and players must be honest and uphold the best trade practices.

In respect of the consequences of these practices, if not stopped, Rev. Dr. Dawson-Ahmoah said the most obvious and painful one  is to embark on downscaling workers, which will inflict hardship on most families/dependents – especially at this time when employment is difficult to secure.

“Most of our industries are just collapsing because of unfair trade practices.”

“We need to stop this injurious threat to not only the cement industry but all local industries, and therefore we cannot wait for inauguration of the Ghana International Trade Commission ACT, 2016, to provide for regulating the international trade of Ghana in conformity with rules and regulations of the world trade system and to provide for related matters,” bemoaned Rev. Dr. Dawson-Ahmoah.

Current members of the Cement Manufacturers Association, Ghana are: Ghacem Limited; Diamond Cement Group; and CIMAF Ghana.

By: thebftonline.com | Ghana