Experts in the macroeconomic arena emphasize that Ethiopia’s bid to join the World Trade Organization (WTO) is poised to have profound implications across various sectors of its economy, especially for smallholder farmers who form the backbone of the agricultural landscape. Waiting for long to obtain hard currency for importation of agricultural inputs will be tackled and inputs will arrive here with no legal barriers.
According to the experts, while WTO membership could present new opportunities for growth and development, it also introduces a series of challenges that warrant meticulous attention. Particularly, bulky imported items because of the lifting of tariff may negatively affect the local products to be crowded out and ultimately may bring the weakening local industries. This again might aggravate unemployment and social crises.
On the other hand, the experts believe that entering of foreign products here easily might bring opportunity to local manufacturers to prepare themselves to be competent in the market by producing products with standardized quality.
The lifting of tariff also made the country to lose handsome amount of money in the form of revenue, the experts underline.
However, the created chance to Ethiopia to export its items to the member countries with no tariff barrier brings better opportunity to increase the volume of export items and diversify them.
According to economists, Ethiopia’s journey toward WTO membership presents a pivotal moment for smallholder farmers, with the potential to unlock new opportunities while also posing significant challenges.
By carefully considering these implications and implementing strategic measures, Ethiopia can work toward fostering a more resilient agricultural sector that thrives in the global economy. The incoming of technology, knowledge and skill also tremendously change the sector’s productivity to the better.
The success of this endeavor will ultimately hinge on the government’s commitment to supporting smallholder farmers and ensuring their voices are heard in the evolving trade landscape. The small scale agriculture utilizes minimum agricultural input as compared to the other Sub Saharan African countries. It is mostly rain fed and vulnerable to extreme weather conditions with unwanted consequence. Joining the World Trade Organization helps to create conducive environment for attracting Foreign Direct Investment and in such a way, the sector will be beneficial and tackling the sector multifaceted problems will be realized.
As mentioned above, joining the WTO also incurs its own consequence and preparing the country to overcome the challenge is essential. Improving trade laws and standardizing to the international level is vital. In line with this, building the enforcing laws capacity should not be neglected.
To realize being membership of the WTO sooner, encouraging pertinent stakeholders to engage in productive dialogue to maximize the benefits and mitigate the risks associated with WTO membership is crucial. It is vital for the Ethiopian government and stakeholders to develop targeted policies, provide support systems, and ensure inclusive participation in the agricultural sector.
By doing so, the country can work towards enhancing the livelihoods of smallholder farmers while fostering sustainable agricultural growth.
In a significant development for Ethiopia’s aspirations on the global trade stage, Dr. Nicozi Awela, WTO’s Director-General has articulated her resolute support for Ethiopia’s bid to become a member of the esteemed international trade organization. This endorsement comes in the wake of a crucial meeting held in Geneva between Ethiopia’s negotiating team, led by Minister of Trade and Regional Integration, Kassahun Gofe (PhD), and Dr. Awela. The implications of this support extend beyond mere diplomatic niceties; they signal a potential shift in Ethiopia’s economic landscape and its integration into the global trading system.
Ethiopia has long recognized the intrinsic value of joining the WTO, a body that serves as a platform for negotiating trade agreements, resolving trade disputes, and promoting trade liberalization among its member states. The process of accession, however, is multifaceted, requiring not only compliance with WTO regulations but also significant domestic reforms to align the nation’s trade policies with international standards. It should also be understood that most members of WTO countries have better regulatory institutions, financial systems and the Information Communication Technology and these enabled them to be competent in the world market. Hence, side by side with aspiring joining the world organization, preparing the business playing field to the international level is essential.
Ethiopia’s bid has been characterized by a series of bilateral and multilateral negotiations aimed at addressing these requirements.
Minister Kassahun Gofe’s recent remarks following the meeting with Dr. Awela highlighted the progress made thus far in these negotiations. He emphasized the importance of transparency and cooperation in the process, indicating that the Ethiopian team has been actively engaging with various stakeholders to facilitate a smoother accession process. This proactive approach underlines Ethiopia’s commitment to embracing the principles of free trade and economic integration.
Dr. Nicozi Awela’s commitment to supporting Ethiopia’s accession is noteworthy for several reasons. Firstly, her position as the Director-General of the WTO lends considerable weight to Ethiopia’s bid. Her assurance that she will not hesitate to provide support reflects a broader recognition of the strategic importance of Ethiopia within the African continent and the global trading arena.
Moreover, Dr. Awela’s intention to officially call upon African member states to support Ethiopia underscores a collaborative approach that is essential in the context of regional integration. The African Union has long championed the notion of intra-African trade as a pathway to economic development. By rallying support from fellow African nations, Dr. Awela not only strengthens Ethiopia’s position, but also reinforces the collective ambition of African states to enhance their roles in global trade.
While the prospects for Ethiopia’s accession appear promising, several challenges remain. The Ethiopian government must navigate a complex landscape of domestic reforms, which include improving regulatory frameworks, enhancing infrastructure, and addressing trade-related barriers. These reforms are not merely bureaucratic necessities; they are also vital for ensuring that Ethiopia can compete effectively on the global stage.
However, the challenges also present opportunities. The ongoing negotiations provide a platform for Ethiopia to re-evaluate its trade policies and practices. By aligning with WTO standards, Ethiopia can enhance its attractiveness as a destination for foreign investment, stimulate economic growth, and create jobs. Furthermore, accession to the WTO could facilitate greater access to international markets, allowing Ethiopian goods and services to reach a broader consumer.
The international community plays a crucial role in supporting Ethiopia’s accession efforts. Beyond the WTO, bilateral and multilateral partnerships can provide necessary technical assistance and capacity-building initiatives. Developed countries, in particular, have a vested interest in promoting economic stability in Ethiopia, as it contributes to broader regional stability in East Africa.
Development partners can assist Ethiopia in addressing the technical and legal challenges associated with WTO membership. Such support can take the form of training programs for government officials, workshops on international trade law, and advisory services aimed at improving trade facilitation measures. By fostering these partnerships, Ethiopia can better position itself for successful accession and subsequent participation in the global trading system.
Ethiopia’s bid for membership in the World Trade Organization represents a pivotal moment in its economic journey. With the backing of Dr. Nicozi Awela and the potential support of African member states, Ethiopia stands at the precipice of a transformative opportunity. The successful navigation of the accession process will require not only diligence and commitment from the Ethiopian government but also collaborative efforts from the international community.
As Ethiopia embarks on this path, it must remain steadfast in its pursuit of reforms and engagement with global trade norms. The road ahead may be fraught with challenges, yet it is also rich with potential rewards. By embracing the principles of open trade and economic integration, Ethiopia can emerge as a significant player in the global market, contributing to its own development and the broader goals of regional prosperity in Africa.
BY ABEBE WOLDEGIORGIS
THE ETHIOPIAN HERALD THURSDAY 27 MARCH 2025
