Ethiopia’s WTO accession plan faces delay

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Ethiopia’s World Trade Organization (WTO) accession plan will take more time from the original target that was projected to end this year, Capital has learnt.
After the long delay about two years ago, Ethiopia had commenced the negotiation to be a member of the largest global trade association that would create conducive environment to access global market easily and to be more open for others.
To reinstate the process, a national committee with ten members and chaired by Mamo Mihretu, Senior Adviser to the Prime Minister and Chief Trade Negotiator, had been established mid 2019 and the Working Party that was formed in 2003 and chaired by Danish Ambassador Morten Jespersen met early 2020 after an eight-year pause.
Since the government introduced economic reform about three years ago, massive changes have occurred on economic and legal reforms that shall smoothen the way for the process of negotiation and accession of WTO. Of that the adoption and joining of New York Convention and liberalizing the telecom industry for more players shall be stated, besides massive and radical reforms in the economy structure and government policies.
Mamo said that further negotiation is expected to take place in the coming month on the accession process.
“The negotiation process has taken place as per the schedule. The September meeting is part of that,” he told Capital, but the Chief Trade Negotiator hinted that the country may not accomplish the process as per the original schedule.
When the national committee was established in June 2019 by Prime Minister Abiy Ahmed, the government had stated that it will work to join WTO by the end of 2021.
However, Capital learned that key government economic policies that are vital on the negotiation process and that which will enable the country to be one of the late comers of the 26 years old trade organization may not be restructured or changed until the time frame before the end of 2021.
Through the negotiation process that was started in 2007 and paused in 2013, one of the key areas that WTO members, mainly USA and Canada raised as a precondition was that the country to ease the restriction that imposed on the service sectors like the telecom and financial industries, which are only restricted for Ethiopians or monopoly.
However, this time around the government under the economic reform has broken the over a century telecom monopoly and allowed two more operators to invest on the sector and even introduced partial privatization on the telecom giant Ethio Telecom. Similarly, the government has opened the financial sector for Ethiopian origin with foreign citizenship to be involved on the banking and insurance business, which was not allowed in the past.
While WTO members would not be satisfied by this measure rather from the beginning, they have been insisting that foreign financial firms ought to be allowed to be part of the Ethiopian market.
This would be one of the major reasons for the delay of accession from the original plan of 2021.
“To attain the WTO accession as per the original plan we have to take some policy changes that would not be completed in these coming months,” Mamo explained.
He mentioned the reform on the financial sector as one of the policy changes that would be seen on the process of negotiation but may not be seen in tangible decision in the coming few months from the government’s side.
“We may have different type of grace period for the opening up of some sectors like the financial industry but members demand government commitment of policy changes,” national committee chair elaborated.
While he confidently stated that the process would be ended by the coming year. It was not the first time hearing the accession plan facing delay. The global pandemic, COVID 19, was also stated that it would threaten the original plan of accession.
In different occasion the government stated that the reform on the financial sector and opening up foreign actors was seen.
Experts in the global trade association said that opening up of the financial sector may not happen immediately but it would occur gradually over the years time as per the agreement between member states and Ethiopia, but countries may demand the government decision, for instance, it may say the financial aspect will be opened after this year or within this period of time.
The national committee that supports by technical committee with different expertise and sectors is comprised of: Ministry of Foreign Affairs, Revenues, Finance, Trade and Industry, National Bank of Ethiopia, Planning and Development Commission, Attorney General and Policy Study Institute.
It is to be recalled that members expressed unanimous support for the resumption of Ethiopia’s WTO membership negotiations at the 4th meeting of the Working Party on the country’s accession, held on 30 January 2020. It was the first meeting of the working party in nine years. At the time Ethiopian delegation led by Mamo said it was ready to work jointly with members to advance and, hopefully, conclude, the accession process by the end of 2021.
At the time with the meeting of Ethiopian delegation, Ambassador Jespersen said that this meeting convened after years, has been critical at least on two accounts: first, sending a clear message that the accession of Ethiopia is back; and second, Ethiopia’s engagement is decisively different from the past — it is pro-active and offensive, as the WTO accession is integral to Ethiopia’s ambitious economic reform agenda.
The Working Party reviewed the revised Factual Summary of Points Raised, which described developments in Ethiopia’s foreign trade regime.
After the January 2020 session, the next Working Party meeting was expected to take place about a year ago, while the global pandemic paused challenges for global system has forced that did not happen.
The country started work to join the WTO two decades ago, and it has been an observer at WTO since 1997. In 2002 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.
WTO that was established in 1995, includes 164 countries as member and it has formed agreements in trades and related issues like intellectual property as a pillar.