Private Sector Starts Internal Dialogue, Consultation Process to Provide Inputs into Government-led WTO Negotiations

Although the negotiations would be driven by WTO members’ requests, the workshop was concluded with a conviction that Ethiopia should assess potential benefits from liberalization from the perspective of its own ambitions in growth and development.

Participants expressed the need to explore different scenarios vis-a-vis services sectors: such as partial liberalization, and including use of flexibilities and transition periods allowed for LDC countries. Priority sectors where WTO acceding countries have committed to increased market opening and competition include: telecommunications, financial services, tourism, transport and others. As a result of the workshop, private sector representatives agreed to undertake its own assessment and consultation process, so as to put forward recommendations on trade in services negotiations in a position paper. The position paper would be prepared in close collaboration with different private sector associations and stakeholders, under coordination of ECCSA. The recommendations are expected to be presented for consideration by the Government, in the month of April.

Since applying for WTO Membership, over ten years ago, the Government intends to formulate its initial offers services in the coming months, as a basis for further negotiating with WTO Members.

At the dialogue, which was attended by over 50 representatives from private sector organizations, as well as university and researchers, participants exchanged views on Ethiopia’s interest in the trade in services, as part of the WTO accession talks.

In her opening remarks, Ms Mulu Solomon, President of ECCSA, said that backbone services, such as transport, telecommunications, 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 put forward our interests and suggestions on different and complex parts of the WTO Accession process, such as the services negotiations. In that, the private sector is to position as constructive partners to the Government. Because, whilst Government conducts the negotiations, the WTO Accession negotiations really concern the private sector.

Ato Gashaw Debebe, Secretary General of ECCSA, referred to the long-standing cooperation between ECCSA and ITC, aimed at bringing about stakeholder confidence for Ethiopia’s WTO membership –especially amongst the private sector-, which will continue to feed the private sector understanding and engagement on this important issue. He emphasized the strong ambition of ECCSA to sensitize the private sector on WTO Accession and related policy issues, and represent Ethiopia’s businesses by providing valuable inputs and partner with the Government.

Progress in Ethiopia’s accession negotiations has been slow, but negotiations are to be started in the year to come. Within the next months, as confirmed by Ato Geremew Ayalew, Director at Trade Negotiations Department of Ministry of Trade, the Government intends to table its initial offer on trade in services, as a basis to starting bilateral negotiations with WTO members, and holding a next (fourth) Working Party meeting at WTO in Geneva. In his remarks, he confirmed that ‘input of the private sector in the Government negotiation strategy is very crucial, especially in this phase of drafting initial offers, as a basis for trade in services [and trade in goods] negotiations.’ He also said that WTO rules offer sufficient flexibility for Governments to continue protecting its local producers, in the area of Goods, as well as in the area of Services. WTO Accession does not equal liberalizing across the board.’

Last year, the Government has already tabled its initial offer on trade in goods, which proposes maximum tariff bindings for Ethiopia’s imported goods. Following an intensive process of research and consultations with associations, the private sector (represented by ECCSA, assisted by one local trade policy consultant) has put forward its recommendations to the negotiating team on selected priority sectors.

As mentioned by Mr Rajesh Aggarwal, Chief of ITC’s Business and Trade Policy section, 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 entail more complex area of negotiations, and more demanding in terms of domestic decision-making and reforms.

 This, in particular, as some degree of liberalization and competition offered in key infrastructure sectors (such as financial, telecommunications) has proven to be essential, as experienced by all WTO Acceding countries including LDC’s (recently LaoPDR and Tajikistan).

During the workshop, the private sector representatives expressed the desire to weigh the pro’s and con’s of opening up certain services sectors, and assess the need for liberalization or protective stance for each sector. In this process of fact-finding, it was felt that the point of departure should not be the demands from WTO Members, but rather the potential benefits for Ethiopia, against the background of its own ambitions for growth and development (such as reflected in GTP).