The agreement which is likely to be reached by early this year will reduce illegal logging, reverse the devastation of the country’s forests and halt the slide in timber sales to Europe.
The agreement is as a result of gangs of unlicensed chainsaw operators that devastate the country's forests, depriving the government of revenue in the process.
CITY & BUSINESS GUIDE learnt that once implemented, timber products covered by the agreement can only be sold in Europe with a license certifying their legality.
But skeptics warn that high domestic demand for timber and a growth in non-European markets may limit the impact of the deal.
Some European government buyers have already tightened timber procurement policies as they only want to buy timber that is clearly certified.
“Any country that considers the EU to be a major trading partner has to take VPA seriously,” Chris Beeko of the Forestry Commission said.
Ghanaian timber makes up just 6 percent of European imports, though roughly half of all Ghanaian timber exports are destined for Europe.
In 2004, some 60 percent of Ghana's timber exports went to Europe.
These days, European buyers take just 42 percent due to both the growing wariness amongst European buyers and the growth in markets elsewhere in the world.
There is a danger that exporters will buy illegally-harvested timber and sell it to less closely-regulated markets, but Ghanaian law prohibits the export of raw logs, favoured by China, whose demand for commodities can shadow environmental and other concerns.
The country also wants to ensure only legally-harvested timber is sold locally.
Timber is one of Ghana’s biggest foreign exchange earners as it bagged over $1 billion in 2007.
By Charles Nixon Yeboah