Ethiopia is working to complete its accession to the World Trade Organization (WTO) by next year, Senior Policy Advisor and Chief Trade Negotiator at the Office of the Prime Minister said.
In an exclusive interview with ENA, Senior Policy Advisor and Chief Trade Negotiator Mamo Mihretu revealed that the negotiation toward accession to WTO which started 16 years is making progress.
In a multilateral negotiation held last January with WTO member countries, Ethiopia had examined its trade and investment regime against WTO agreements and requirements.
For the most part the country’s trade regime is consistent with WTO rules and regulations, the senior policy advisor said, adding “we believe that there will not be an important setback for Ethiopia to be part of the multilateral trading system.”
Similarly, significant progress was made during bilateral trade negotiations with 8 member countries in Geneva last January.
“The main issue when it comes to bilateral negotiations is the tariff that we apply in our trading goods and the kind of investment or service sector that we open to foreign investors,” Mamo explained.
Furthermore, he pointed out that the government has made significant progress; and there is a lot of momentum, goodwill, and support from WTO member countries to see Ethiopia complete its accession process.”
“Our goal is to conclude Ethiopia’s WTO accession negotiations in 2021. But that of course very much depends on what we will successfully discuss and conclude bilateral negotiations with the member countries. For us concluding the WTO accession is critical because we consider it an external anchor to our domestic reform effort. Being part of the multilateral trading system is a natural outcome of the domestic economic reform program that the government is currently undertaking,” the chief trade negotiator stressed.
Concluding WTO accession process will create clear, predictable external market access to Ethiopian traders and investors, Mamo stated, adding “WTO, for the most part, will have a very positive impact on the domestic private sector.”
The government is not eliminating tariff on goods coming to Ethiopia, but putting a ceiling to it. “So, most of the private sector will still enjoy the protection that prevails.”
The most sensitive part of the negotiation is the extent of will allowing foreign investors to come and operate in Ethiopia, particularly telecom and financial institutions, the chief trade negotiator stated.
However, Mamo stated that in telecom, regardless of WTO, the government is currently undertaking a reform program and as a result new telecom operators are allowed to come in and invest.
The sensitive issue is the financial sector, according to Mamo, who pointed out that most of the member countries would want to see Ethiopia open up its financial companies.
He said the government’s position in that regard very much depends on the reform program.
“We believe we can negotiate WTO accession by maintaining the current prudential regulations on the financial sector. We need to make a distinction between opening up and deregulation. We will still maintain our strong prudent regulatory framework while creating a competitive investment climate for investors to come and operate in Ethiopia,” Mamo emphasized.
He believes that WTO accession will fundamentally transform Ethiopia’s investment climate and modernize trading rules and regulations thereby ultimately attracting FDI.