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BusinessEthiopia to recommence negotiation process on WTO accession

Ethiopia to recommence negotiation process on WTO accession

Chief negotiator downplays CFTA criticism

After nearly seven years of discontinued negotiations, Ethiopia has initiated the accession process to join the World Trade Organization (WTO) afresh and new round of working party talks will resume in October, The Reporter has learnt.

Mamo Esmelealem Mihretu, senior policy advisor to the Prime Minister and chief trade negotiator of Ethiopia, told The Reporter that the stalled accession will resume with a fourth round of negotiations taking effect in October.

According to the chief negotiator, Ethiopia is on a new footing to quicken the accession process that began some 15 years ago. So far, the accession process had proceeded with goods offer where it is believed that negotiating parties have reached terms on how tariffs and quotas of goods should be handled.

However, the daunting and perhaps the strenuous part of the accession process, was on the service offer. It took years for the government to reach the point of opening-up the contentious service sectors that remained centrifugal with negotiating parties, mostly western members of the WTO.

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Currently, according to Mamo, the new administration has voluntarily opened-up to liberalize the telecom, logistics and power sectors. More recently, the banking sector has seen partial liberalization where foreign citizens of Ethiopian origin have just been granted to form and run a bank.

Once the WTO accession process settles, which will probably materialize in 2021, Ethiopia’s international reputation will be further enhanced and the security and confidence of foreign investors will be well maintained, Mamo outlined.

“It’s not about tariffs elimination but the overall target we have is what makes the trade agreement essential,” Mamo said.

According to Mamo, creating an open business environment is not only to have a favorable trade advantage but also to ensure the country has an integrated and coherent approach to its regional and global agendas. The government is advancing on a closer integration in the Horn of Africa, the senior advisor added.

The policy orientation towards joining the Africa Continental Free Trade Agreement (CFTA) is one exemplary engagement where Ethiopia has secured a political and economic advantage in ratifying the accord, Mamo argues. From the political viewpoint, Mamo claims Ethiopia has played a leading role in bringing the CFTA into reality.

From a business and economic perspective, Mamo said that “Ethiopia has an aggressive interest with its existing 20 percent export market share in Africa.” The reciprocal trade volume represents only four percent of imports. Ethiopia sees a potential in the service sector export where skilled professionals will have job opportunities elsewhere across Africa.

But this view of the government remains less conversed among the wider public domain. That was reflected during the “Addis Wog” – a series of dialogue forum, the Office of the Prime Minister has organized. And last week, while staging the economic reform program to a selected group of audience, a participant provoked the advisor saying CFTA will make Ethiopia vulnerable and will force the country to become a whole and net buyer of goods and services from the entire Africa.

However, Mamo showed how that will not be the case. The continental free tariff and quota agreement obliges nations to eliminate custom duties and preferential treatments. However, the tariff free agreement will be enforced in a span of 15 years and Ethiopia will not be liberalizing duties on certain goods which it deems a major source of duties. For instance, the likes of vehicles importation is to be exempted from immediate effect of the zero tariff agreement that will be enforced from 2020 with full implementation within 15 years.

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