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BusinessTurkey set to negotiate trade with Ethiopia next week

Turkey set to negotiate trade with Ethiopia next week

As a following up to the recently held joint economic cooperation meeting between Turkish and the Ethiopian officials late in December, Turkey says it is set to initiate trade and investment negotiations with Ethiopia. The negotiations are scheduled to be held next week in Ankara.

Fatih Ulusoy, Ambassador of Turkey to Ethiopia and the African Union told The Reporter at the sidelines of the Ethio-Turkish Business Forum held on Thursday that officials of the two countries are set to negotiate trade, economic and investment terms.

Back in December, a Turkish delegation led by Nihat Zeybekci, Minister of the Economy, is remembered for putting forward a list of requests that the Government of Ethiopia should consider. Among the requests, permission of operation of correspondent banking and wide-body and cargo aircrafts were the major ones.

The minister requested Ethiopian authorities to ink and launch a free trade agreements. In addition to that, the economy minister said that it was not the intention of his country that Turkish Airlines would compete with Ethiopian in African skies. “We like to see Turkish Airlines operate wide-body, larger aircraft in Ethiopia,” the minister said without mentioning the type of institution to be set up. The request to have corresponding banking relations to be operational and to allow the operation of a branch banking system from Turkey was not favorably considered. The Ethiopian government declined to accept the requests for the obvious reasons it had sustained for years.

Asked by The Reporter during the joint commission meeting, whether the requests made by the Turks would result in anything new, Ahmed Abitew, the Minister of Industry said that it would not be considered in the near future, the reason being the local banking sector, especially the private ones, were too weak to withstand foreign competitions.

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Yet, the Ethiopian minister said that a possibility of opening a liaison operation for banking was on the table. The wide-body, larger aircraft operation in Ethiopia, according to the minister, would not be addressed swiftly. For one reason, the airport is under renovation to accommodate such aircraft. In addition to that, Ethiopian still required protection, Ahmed told The Reporter, underscoring the need for further diplomatic and economic negotiations.

The list of requests include the issuance of long-term and multiple visas. Ahmed said that the required visas for investors were considered but the details will be worked out by his technical team together with the Turks.

While Turkey insists to see changes in the business environment here, Ethiopia as well urged Turkey to consider preferential trade opportunities to Ethiopia declining to grant Turkey an open door free-trade policy the government of Turkey was keenly looking for.

According to Ahmed, Ethiopia is not ready to introduce a free-trade agreement with Turkey saying local firms were not capable of contending with Turkish exporters. In turn, Turkey at least could introduce a bilateral preferential trade opportunity that mostly favored Turkish businesses exporting from Ethiopia. These are some of the topics the technical teams of the two countries will divulge for further negotiations when they meet in Ankara next week.

Apart from that Ambassador Ulusoy indicated that an Ethiopian delegation representing the agriculture sector will also meet Turkish counterparts. In the meantime, a company that specializes in the energy sector is also expected to pay a visit to Ethiopia. That move, according to the ambassador, will contribute to diversify the Foreign Direct Investment (FDI) Turks have so far made. The FDI remains concentrated mostly in the textile sector.

So far some 2.5 billion dollars’ worth of 148 investment projects have been implemented in the country. The half-a-billion dollar trade volume the two countries have bartered is expected to double within five years’ time.

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