Commentaries | Jul 06,2019
After an eight-year halt, Ethiopia has reinstated the World Trade Organisation (WTO) accession process, placing a revised offer for goods and starting bilateral market access talks with some countries.
The two developments were achieved last week at the fourth meeting of the Working Party on Ethiopia's Accession that Ethiopian trade negotiators, led by Mamo Mihretu, chief trade negotiator and senior adviser at the Office of the Prime Minister, attended in Geneva, Switzerland.
During the meeting, Ethiopia provided a revised goods offer, which envisages all tariff lines. The negotiators offered to cut tariffs by 90pc on traded goods and hope the rate could not go above that level.
Ethiopia also provided an initial services offer of market access commitments in 10 services sectors including lease financing, and the negotiators gave no offer on the financial sector. The initial services offer was made for the first time since Ethiopia made its application for membership in 2003.
Eyob Tekalign (PhD), state minister for Finance, Misganu Arga, state minister for Trade & Industry, and Zenebe Kebede, permanent representative of Ethiopia in Geneva, are among the Ethiopian officials who accompanied Mamo during the meeting of the Working Party on Ethiopia's Accession, held on January 30, 2020.
The meeting was chaired by Morten Jespersen, Denmark's Ambassador at the Permanent Mission of Denmark to the United Nations in Geneva, with the presence of six WTO members.
"The convening of the meeting has been critical on at least two accounts," said Jespersen, chair of the meeting.
It sends a clear message that the accession of Ethiopia is back, and the engagement is decisively different from the past – it is pro-active and offensive, as the accession is integral to Ethiopia's ambitious economic reform agenda, according to Jespersen.
During the meeting, the Ethiopian delegation pledged to conclude the accession process by the end of 2021, according to a statement from the WTO.
Mamo confirmed to Fortunethat the team has begun bilateral talks with countries such as Japan, Russia, the United Kingdom, New Zealand, the United States, Canada, and the European Union to mention but a few.
"We'll continue to have engagements in the coming months to develop bilateral agreements," Mamo told Fortune.
The negotiators are hoping the main bilateral negotiations will be with the European Union and the United States and believe negotiations with other countries will not be difficult if they first overcome the negotiations with the US and EU.
The process of reinstating the accession was started as part of the ongoing economic reform plan the government kicked off recently. To reinstate the process, Prime Minister Abiy Ahmed (PhD) formed a 10-member national committee last June after the Council of Ministers approved a legal framework for the accession.
Another technical committee, which had 40 members, was also formed. Both committees commenced operations by holding their first meeting in June of last year at Hyatt Regency Hotel. The technical committee also outlined recommendations before the national committee travelled to Geneva for the meeting.
During Geneva's meeting, the team also made substantial progress on the multilateral track, according to Mamo, adding that the WTO Secretariat will start drafting the working report, which will outline the terms of Ethiopia's accession.
WTO members were also invited to submit comments and questions by February 28, 2020, as an input for the WTO Secretariat to prepare an "Elements of a Draft Working Party Report".
The chair also asked the delegation of Ethiopia to revise its legislative action plan and to continue submitting legislation to update members about the ongoing legislative reforms in Ethiopia.
The chair of the meeting recommended the members hold the 5th meeting of the Working Party after the northern summer break.
Ethiopia started the journey to join the WTO 18 years ago, and it has been in an observer status since 1997. In 2003 it formally applied for accession and spent the following years, until 2006, producing its Memorandum of Foreign Trade Regime, which was distributed to members in January 2007, when negotiations began.
Established in 1995, the WTO, which sets global rules for trade agreements that cover issues related to goods, services and intellectual property, has 164 member countries and 23 observers. It also sets principles of liberalisation, countries’ commitments to lower customs tariffs and other trade barriers and to open and keep open markets for services.
In the three rounds of a meeting of the Working Party made before 2013, issues of agriculture, domestic laws, initial offers on goods, information on import licensing procedures and information on state trading enterprises were discussed. However, the process was paused for eight years, which Ethiopian experts used to conduct research.
The Trade Relations & Negotiations Directorate under the Ministry of Trade & Industry has been organising seminars, providing capacity building training and awareness creation programmes.
The negotiators placed service offers for the first time following the ongoing privatisation process, according to Khalid Kebede, investment and trade lecturer at Bahir Dar University School of Law.
"There were business areas that weren't allowed for foreign companies," said Khalid, "but the privatisation process will unlock these areas."
Khalid also says that Ethiopia might not benefit much from the scheme since the country mainly exports agricultural commodities.
"Since the manufacturing sector is at an infant level," said Khalid, "Ethiopia's membership to the WTO will give a market to only agricultural products."
PUBLISHED ON Feb 01,2020 [ VOL 20 , NO 1031]
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