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21 March 2007
Ethiopia’s quest to join the World Trade Organization (WTO) has finally reached the clarification stage with Canada and the US being the first two countries to send questions on Ethiopia’s Memorandum of the Foreign Trade Regime.
On March 6, 2007 the two North American nations sent a four-page and 20-page clarification questionnaire regarding Ethiopia’s bid to join the (WTO).
The four-page Canadian document focuses on the service sector with specific attention given to the Ethiopian telecommunications industry. It asks for additional details on the individual responsibility and relationship between the Ethiopian Telecommunications Agency (ETA) and the Ethiopian Telecommunications Corporation (ETC).
The Canadian questionnaire requests clarification on the type of joint ventures permitted in the sector and asks whether ETC regulates the telecom sector in addition to granting issuance, renewals and cancellations.
For the time being, the Ethiopian telecom sector remains closed to private investment, something that is alien to its Canadian counterpart, where the telecom market is highly saturated and competitive.
The US also raised similar points about the telecom and service industries in its 20-page questionnaire, although its focus was more on economic policies and the agricultural sector.
Additionally, the Americans wished to be informed as to when supervision of the financial sector is going to begin and whether the country had foreign consultancies done on the tax code that it revised in 2002 after extensive consultation with the private sector.
Sources close to the situation disclosed to Fortune that the ETC, and by extension, the telecom sector are far from being liberalised any time soon.
ETC is undertaking a year long restructuring program to make it more competitive by international commercial standards, at which time private investment in the sector would be considered, sources added.
Currently, Ethiopian law prohibits any foreign investors to enter either the financial or the telecom sectors.
The Ministry of Trade and Industry (MoTI) is responsible for the WTO accession process and set up a WTO department to handle all related issues.
It is this department that is expected to give the requested clarifications as they come in, and to negotiate acceptable responses to member nations that want additional information.
“We cannot say that negotiations have started,” Ahmed Tussa, state minister of MoTI told Fortune.
“It will be difficult and time consuming to go through the questions one by one,” he added, “The most logical thing would be to wait for more to come from other countries while trade experts examine what we already have.”
Ethiopia received approval for accession on January 13, 2003 after remaining a WTO observer for some time. On February 10, 2003, the General Working Party formed a Working Party specifically for Ethiopia, and appointed the British Ambassador to the WTO, N. McMillan, as Party Chairman.
Once accession was approved, Ethiopia formed a task force responsible for preparing and presenting the Memorandum of the Foreign Trade Regime to the Working Party. The 15-member Technical Committee was selected from the Ministries of Trade and Industry, Revenues, Finance and Economic Development, Justice, Foreign Affairs and Works and Development.
The task force also includes experts from the National Bank of Ethiopia (NBE), the Ethiopian Customs Authority (ECA) and the Science and Technology Commission (STC).
This Committee is led by the Ministerial Committee, established in 2001 and chaired by Girma Birru, minister of Trade and Industry. After a two-year delay the Council of Ministers finally Okayed the Memorandum of the Foreign Trade Regime on November 10, 2006. The document was sent to Geneva on December 22, 2006.
By Metasebia Feleke - FORTUNE STAFF WRITER