At the World Economic Forum in Davos this January, trade dominated the conversations in ways it hasn’t for years. Heads of state, central bankers, and corporate titans spent less time on climate pledges and more time fretting over what one European official called “the great unravelling” of the global trading system. For Ghana, watching these developments from Accra, the implications are existential.
The numbers tell a sobering story. Global economic growth is projected at just 2.6 per cent in 2026, with developing economies excluding China slowing to 4.2 per cent. But the growth slowdown isn’t the biggest threat. It’s the fracturing of the world into competing regulatory empires, each demanding that smaller countries like Ghana choose sides.
Ghana has spent decades perfecting the art of equidistance in its foreign economic relations. We’ve maintained warm relations with Europe whilst courting Chinese infrastructure investment. We’ve partnered with the United States on security while keeping our cocoa flowing to European chocolate makers. This careful balancing has served us reasonably well. The trouble is, the world has fundamentally changed, and our old playbook no longer works.
Ghana now faces what economists call an impossible trilemma: satisfy European environmental standards, maintain Chinese infrastructure financing, or align with American strategic minerals policies. We cannot do all three. The era of equidistance has come to an abrupt end. The question is no longer whether Ghana will have to choose, but how strategically we’ll manage the choosing.
Three Empires, Three Demands
The European Union has essentially turned environmental compliance into a trade weapon, though Brussels would never describe it in such blunt terms. Technical regulations now affect roughly two-thirds of global trade, raising compliance costs especially for smaller exporters like Ghana. Environmental, social, and security-driven rules are expanding further in 2026, and Ghana sits squarely in the crosshairs.
Take the EU Deforestation Regulation, which came into force in December 2024. Ghana’s cocoa exports, worth roughly €1.8 billion annually and representing 70 per cent of our cocoa sales, must now prove zero deforestation sourcing. The compliance costs are staggering. The Ghana Cocoa Board has invested approximately €180 million in traceability systems, GPS mapping of farms, and certification infrastructure just to satisfy Brussels’ requirements. That’s money that could have funded irrigation systems, bought improved seedlings, or supported farmer cooperatives.
Then there’s the Carbon Border Adjustment Mechanism, Europe’s latest scheme to protect its industries whilst claiming climate leadership. Ghana’s aluminium and cement sectors, which rely on coal-heavy electricity grids, now face carbon tariffs when exporting to Europe. We’re being penalised for not having the infrastructure that centuries of European industrialisation afforded them.
China, meanwhile, offers a completely different bargain. Beijing doesn’t particularly care about our carbon footprint or our forest cover. China wants infrastructure deals tied to resource extraction. The $1.9 billion Sinohydro agreement, exchanging bauxite mining rights for roads, bridges, and interchanges, exemplifies the model. China built the Tema Port expansion, the Accra to Tema motorway, and supplies 40 per cent of our thermal power plants.
Here’s what makes this problematic: we’re not building capacity, we’re renting it. When Chinese firms construct our roads, they bring Chinese engineers, Chinese equipment, and Chinese workers for skilled positions. Ghanaians provide manual labour. We’re not learning to build world-class infrastructure ourselves; we’re becoming permanent clients.
The United States has entered the game late but with characteristic force. The Trump administration announced what it calls “personal minerals diplomacy” in January 2026, essentially demanding that countries rich in critical minerals choose between American markets and Chinese partnerships. The $553 million Lobito Corridor, financed by the US Development Finance Corporation, represents America’s belated recognition that China has been winning the resource competition in Africa.
For Ghana, this creates immediate headaches. Our lithium sector has become a geopolitical football. Atlantic Lithium is Australian listed with UK connections, which pleases Washington. But Chinese firms are circling with better financing terms. The Americans want us to exclude Huawei and ZTE from telecommunications infrastructure associated with lithium mining areas. The Chinese have made it quietly clear that walking away from them in the minerals sector might lead them to reconsider their broader infrastructure commitments.
We’re caught between three incompatible systems. Since 2020, around 18,000 new discriminatory trade measures have been introduced globally. Ghana’s export sectors now face three separate regulatory regimes with different standards, different compliance costs, and different political expectations. The estimated annual compliance cost exceeds $400 million, equivalent to roughly 1.2 per cent of GDP.
Why the Old Playbook Has Failed
Ghana’s instinct has always been to avoid choosing sides. Equidistance served us well during the Cold War. Kwame Nkrumah’s leadership of the Non-Aligned Movement gave Ghana outsized diplomatic influence. We could play the Soviets against the Americans, extracting development aid from both, whilst maintaining our independence.
But that world is gone. Today’s fragmentation is fundamentally different from Cold War bipolarity. During the Cold War, both superpowers wanted to develop countries’ political allegiance and were willing to pay for it. Neither particularly cared whether you bought Soviet tractors or American wheat, as long as you voted the right way at the United Nations.
Today’s competition is about supply chains, technology standards, and regulatory dominance. The EU doesn’t want Ghana’s vote at the UN; it wants our supply chains to conform to European standards. China doesn’t want our political allegiance; Beijing wants our lithium, our manganese, and our bauxite integrated into Chinese manufacturing supply chains. America wants to ensure that critical minerals don’t flow exclusively to China.
This makes equidistance functionally impossible. Our cocoa sector has already restructured around EU standards because we had no choice; 70 per cent market share cannot be replaced overnight. Our infrastructure sector is locked into Chinese partnerships because no one else offered billions in financing. Our nascent lithium sector faces American pressure because Washington belatedly realised that the entire renewable energy transition depends on minerals that China currently dominates.
A Strategy for Survival
If choosing one bloc is impossible and maintaining equidistance is becoming untenable, what’s left? The answer lies in strategic sectoral differentiation: aligning with different powers in different economic sectors based on where our leverage is greatest, and our dependencies are most manageable.
For agriculture and cocoa, full EU alignment is unavoidable. With 70 per cent of our cocoa exports bound for Europe, we have no realistic alternative market at that scale. This means accepting EU environmental standards as the price of market access. But we should accept these standards whilst loudly demanding that the EU provide transition financing for compliance costs. If Brussels wants zero deforestation cocoa, let Brussels pay for the GPS systems and certification infrastructure.
Our Brussels mission should focus on two objectives: ensuring that EU environmental requirements come with EU financing support, and negotiating longer compliance timelines that allow Ghanaian farmers to adapt without being bankrupted.
For infrastructure, continued Chinese partnership makes practical sense, but we need harder bargaining. Every infrastructure deal should include mandatory technology transfer clauses, minimum Ghanaian skilled labour requirements, and genuine capacity building. If China wants our bauxite, Chinese contractors must train Ghanaian engineers, Chinese firms must partner with Ghanaian construction companies, and management positions must go to Ghanaians from project inception.
Ethiopia’s railway deals with China include provisions for Ethiopian engineers to receive training in China and manage operations within five years. Ghana should demand similar arrangements. The goal is not to exclude China, it’s to ensure that Chinese infrastructure investment leaves us more capable, not more dependent.
For critical minerals, strategic pluralism is essential. Ghana should license lithium projects to diverse investors: Australian, European, Canadian, and Chinese firms. But we must refuse exclusive supply agreements with any single bloc. Diversifying our mineral buyers maximises Ghana’s bargaining power.
The Australians offer mining technology without the geopolitical baggage that American partnerships carry. The Canberra mission should be actively pursuing partnerships with Australian mining technology firms, who have world-leading expertise but don’t particularly care whether Ghana also maintains Chinese infrastructure partnerships.
The Institutions We Need
Implementing sectoral differentiation requires institutional capacity that Ghana currently lacks. We need an Economic Diplomacy Coordination Council, chaired by the President, including the Ministers of Foreign Affairs, Trade, Finance, and Energy. This body would ensure that when one ministry negotiates with China, another isn’t simultaneously making contradictory promises to the Americans.
Our diplomatic missions must transform from protocol offices into economic intelligence units. The Brussels mission needs a dedicated Economic Counsellor monitoring EU regulatory developments before they become law. Early warning about incoming regulations gives Ghana time to organise resistance or negotiate transition arrangements.
The Geneva mission must prioritise WTO reform advocacy. The WTO’s 14th ministerial conference in Yaoundé faces enormous pressure, with the dispute settlement system broken and major powers increasingly ignoring multilateral disciplines. For smaller countries like Ghana, the alternative to WTO rules is the law of the jungle. We should be leading African efforts to restore the Appellate Body and strengthen provisions that give developing countries policy space.
The Canberra mission should become a hub for mining technology partnerships. Australia’s approach to Pacific Island nations, offering genuine partnerships without heavy conditionality, provides a potential template for engagement that doesn’t require choosing between Washington and Beijing.
The Uncomfortable Endgame
None of this will be easy. We’re a small country dependent on commodities in a world fragmenting into rival blocs led by vastly more powerful states. Our room for manoeuvre is limited and shrinking.
But we’re not entirely powerless. Europe needs our cocoa. China needs African resources and African votes. America needs to ensure that critical minerals don’t flow exclusively to Beijing. Each of these needs gives Ghana marginal leverage, provided we’re smart about using it collectively with other African states rather than negotiating alone.
The African Continental Free Trade Area offers potential strength in numbers if we can make it work. West African countries negotiating collectively with the EU on environmental standards, or African mineral producers jointly bargaining with China over processing requirements, would wield considerably greater leverage than Ghana acting alone.
The risk is that we end up with the worst of all worlds: alienating all three blocs through inconsistent positioning, satisfying none, and benefiting from none. This is where leadership matters. Ghana needs a clear-eyed assessment of our genuine interests in each sector, a coherent strategy for advancing those interests, and the diplomatic skill to implement that strategy without unnecessary antagonism.
The world has changed, and it’s not changing back. The era of equidistance through ambiguity has ended. What Ghana needs now is strategic clarity within sectoral differentiation: clear about our interests, clear about our priorities, and clear about what we’re willing to trade to protect what matters most.
Global trade in 2026 stands at a critical juncture. For Ghana, the choice is not between blocs but between intelligent sectoral differentiation and economic vassalage. The question is whether we have the institutional capacity, political will, and diplomatic skill to manage what comes next. The next few years will provide the answer, and the stakes could scarcely be higher.
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Dominic Senayah is an international relations researcher and policy analyst specialising in trade policy, economic development, and institutional reform. He holds an MA in International Relations from the UK and publishes regularly on Ghana’s political economy.
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