The Ethiopian Horticulture Producer Exporters Association (EHPEA) calls the government to be vigilant in light of joining the Economic Partnership Agreements (EPA) as government remains undecided on the matter.
It is recalled that the country’s horticulture industry registered massive success in the export market becoming the second largest hard currency earner in the agriculture sector after coffee. The major export destination being European countries, Ethiopia has been utilizing the Everything But Arms (EBA) duty free scheme initiated by EU to maintain its market in Europe.
The EBA preferential treatment which is accorded by EU provides the initiative to remove all quotas and tariffs on all products originated from the Least Developed Countries (LDCs) in African, Caribbean and Pacific (ACP) except arms.
However, EU and ACP have also agreed to put in place the EPAs which give reciprocity for all countries from both sides to open their markets. So far some countries from Africa, other LDCs, signed the EPAs to open some high percentage of their market for European countries gradually.
On the workshop called by EHPEA which was held on Tuesday December 28, the association expressed its concern by advising government to be prudent on taking to account the benefit of Ethiopia in general and the horticulture sector in particular.
“If the country inks on the EPAs at the current content of the agreement, the performance of our industry shall significantly be affected. Farms in the EU are strong and experienced besides betting different support from their governments, but on the other hand the industry in Ethiopia is immerging and running with several challenges,” , Executive Director, said.
At the current level, the trade balance is favoring Europe except very few countries like the Netherlands, which is the major destination for Ethiopian floriculture products. The latest figure shows that Ethiopia exports about USD 550 million worth of commodities that is mainly primary goods to Europe while on the other hand the import from the stated continent is USD 1.8 billion.
Experts said that if EPAs shall be in effect the trade balance shall be widened.
“Ethiopia might not be competitive after the EPAs especially in the horticulture, wheat, meat products poultry and other agricultural products. The European governments subsidize their agricultural sector and the enabling environment which are very dynamic,” Tewodros explained by referring the early assessment that was conducted by EHPEA on the effect of EPAs.
He said that EPAs shall crumble the Ethiopian industry if it is not properly articulated.
“The agriculture sector in general and the horticulture industry in particular is the major source of hard currency, so the strong negotiation pattern is required,” the Executive Director strongly stressed.
He also added the newly coming agro processing industries shall be paralyzed because of the coming of the opening up of the market through EPAs.
He said that the free market agreement has also different impacts in the revenue for the country that leads to diminishing the investment on social facilities, which houses job mostly managed by women.
“As an association we propose that under the current context the EPAs, ought not to be inked even though some ACP countries have signed to it. We have to continue to benefit from the EBA initiative,” he said by adding alternative configuration comprising of LDCs to be implemented.
The association stated that EHPEA will back further and detailed assessment regarding EPAs potential effect and benefit.
At the workshop Mussie Mindaye, Director General of Trade Relation and Negotiation at Ministry of Trade and Regional Integration (MoTRI), said that despite Ethiopia’s export to EU increasing when EBA was launched, it is not tapping the full opportunity.
“Ethiopia has not been efficiently utilizing and taking the advantages of this preferential market access due to supply side constraints as well as non tariff barriers such as the stringent rules of origin and the high product standard among others,” Mussie elaborated.
He said that the horticulture sector stands a high chance to benefit from EBA, “However, we have to ask ourselves as a country whether we are using the full potential in this position of exporting the product.”
“When we met with EU officials we stated that the country has not properly benefited from the duty free scheme,” he said, adding, “That is why Ethiopia is reluctant to push on the EPA negotiation.”
He said that as a nation the country is insisting for the continuation at least up to the period that the country graduates from the LDCs list.
He added that the country is yet to decide when and in which terms to sign the EPAs, “we need to undertake detail assessment regarding, the benefit and effect of EPAs.”