Ethiopia’s business to play bigger role in WTO accession effort

Ethiopia should assess the potential benefits of liberalization of its services sector as a means to fulfil its own ambitions for growth and development in the upcoming negotiations for the country’s accession to the World Trade Organization (WTO).

This and other aspects of Ethiopia’s WTO accession process were discussed at a workshop on 20 February in Addis Ababa, Ethiopia’s capital, organized by the International Trade Centre (ITC) in cooperation with the Ethiopian Chambers of Commerce and Sectoral Associations (ECCSA). The workshop was attended by more than 50 representatives from the public and private sectors, as well as from academia.

Ethiopia applied for WTO membership more than 10 years ago and aims to become a member by 2014. The government intends to present its initial offer on trade in services in the coming months, as a basis for bringing forward its negotiations with WTO member states. During the workshop, participants were in agreement that to make progress this year, Ethiopia needs to be ready to consider WTO member states’ requests in the area of trade in services, which are a necessary part of the accession process.

Benefits and risks

The workshop looked at the WTO accession process and the benefits to Ethiopia as well as the risks. Participants compared the accession offers made by other recently acceded east developed countries (LDCs), and considered a number of key service sectors that are likely to feature in the current negotiations.

Participants at the workshop heard about the experiences of other countries in opening and regulating markets, such as in the areas of transport, construction, banking, insurance, telecommunications, and professional and tourism services. The need to explore different scenarios for services sectors was discussed, such as partial liberalization and using flexibilities and transition periods allowed for LDC countries.

Mulu Solomon, President of the ECCSA, said that backbone services – such as transport, telecommunications and banking services – are crucial for the efficiency of the manufacturing sector. She said: “WTO accession and regional integration efforts will play their part in improving Ethiopia’s conditions for doing business. There is a need for the private sector to contribute to this important process by building up our understanding and putting forward our interests and suggestions on different and complex parts of the WTO accession process, such as the services negotiations.”

Private-sector representatives agreed to assess the pros and cons of possible liberalization in selected services sectors and develop private sector recommendations as inputs into the Ethiopian Government’s negotiating strategy. Their recommendations are expected to be presented for consideration by the government in April.
Rajesh Aggarwal, Chief of ITC’s Business and Trade Policy section, said: “The negotiations on goods are not expected to impact much on Ethiopia’s import regime, as tariffs are already relatively low. However, the negotiations on trade in services represent a more complex area of negotiations, and are more demanding in terms of domestic decision-making and reforms as they affect the way services are regulated.”

Ato Geremew Ayalew, Director for Trade Negotiations in the Ministry of Trade, said: “The input of the private sector in the government’s negotiating strategy is crucial, especially in this phase of drafting initial offers, as a basis for trade in services and trade in goods negotiations.” He added that WTO rules offer sufficient flexibility for governments to continue protecting its local producers, in the area of goods and services.