ADDIS ABABA– China’s newly introduced zero-tariff preferential policy is expected to significantly enhance Ethiopia’s export trade volume and strengthen its overall trading system, according to an economist.
Speaking to the Ethiopian Press Agency (EPA), Wachemo University Economics Lecturer Dawit Hayeso (PhD) stated that this landmark zero-tariff decision by one of the world’s largest economies is poised to bolster Ethiopia’s export base, contributing to the growth of the national economy.
The economist elaborated that this duty-free grant on taxable export commodities will help stimulate demand for increased productivity and improve trade competitiveness. In turn, this will enhance Ethiopia’s foreign currency earnings and create more jobs.
Previously, Ethiopia’s export tariffs on certain goods negatively impacted its market and productivity, directly affecting export volume. “When export tariffs rise, a product’s competitiveness and penetration in the global market value chain decline,” Dawit explained. He emphasized that the new policy will be vital in boosting Ethiopia’s export volume and meeting global demand at the desired level.
The expert also highlighted that limited export productivity has a direct effect on employment rates. He further noted that improving productivity efficiency will attract investments and increase hard currency earnings, while enabling greater access to China’s massive consumer market. By removing customs duties across all export categories, Ethiopian exporters now have a significant opportunity to expand into one of the world’s largest markets.
Drawing from the experiences of other countries, Dawit pointed out that bureaucratic red tape and restrictive preconditions have often been obstacles to effective exports. He recommended focusing on the development of efficient infrastructure and facilities to minimize production costs and enhance export competitiveness.
The academician also reiterated that the zero-tariff policy will help Ethiopia diversify its exports, create jobs, and stimulate economic growth, while reducing the country’s reliance on a limited range of export destinations.
It is worth noting that China recently introduced the zero-tariff policy for 33 African countries, including Ethiopia, at the 2024 Forum on China-Africa Cooperation (FOCAC), offering duty-free access to one of the world’s largest consumer markets.
BY ASHENAFI ANIMUT
THE ETHIOPIAN HERALD THURSDAY 3 OCTOBER 2024
