The long-awaited Ethiopia’s quest for joining the WTO is just at the corner. The Minister of Trade, Kassahun Goffe (Dr.), recently reported that Ethiopia expects to be registered at the WTO by the next fiscal year. This is a very important stride forward in the economic development of the country, as it will usher in a remarkable step in enhancing Ethiopia’s efforts to integrate into the system of global trading.
Although the country had to come a long way through the entire process of negotiations and fulfilling the basic requirements, there is still more to be done before the nation seals a final process of registration. The road from 2003 to date was full of zigzags and highly cumbersome.
The expected delay was due to internal reforms, political changes, and global economic conditions. However, countries like Rwanda and Zambia completed their registration in a relatively shorter period of time.
The author outlines on the major advantages that Ethiopia can get from being a member of the WTO and then proceeds to the major actions that the nation is taking in line with WTO negotiations to effectively qualify for membership. This will be followed by some recommendations by the author.
Ethiopia’s potential benefits from becoming a member of the World Trade Organization (WTO) are significant and wide-ranging. WTO membership would provide access to global markets and trade opportunities, as well as a platform for modernizing Ethiopia’s trade and economic policies. What are the key benefits Ethiopia could gain from WTO membership.
Ethiopia would gain better access to international markets, enabling local businesses and industries to export goods and services more easily. This can help Ethiopia expand its export sectors, particularly in agriculture, textiles, and manufacturing. Additional income from the mining, IT technology and cut flower exports and oilseeds and spices as well as other exports could have extended international markets.
Sectors such as agriculture, textiles, and manufacturing can benefit from improved access to global markets under WTO rules. Ethiopian products, such as coffee and textiles, would benefit from reduced tariffs and other barriers in international trade.
WTO membership can make Ethiopia more attractive to foreign investors by providing a predictable and transparent trade environment. Investors are often more likely to invest in countries that adhere to internationally recognized trade rules.
Foreign direct investment (FDI) could help introduce new technologies, create jobs, and foster industrial development in Ethiopia, which aligns with the country’s industrialization goals.
Being a member of the WTO means that Ethiopia would have access to clear internationally recognized trade rules that can enhance transparency and reduce uncertainty in trade dealings.
Ethiopia would be able to take advantage of the WTO’s dispute resolution mechanism, allowing it to address trade conflicts with other countries in a fair and structured manner.
To join the WTO, Ethiopia would need to align its trade policies with international standards. This could drive domestic policy reforms in areas such as customs, intellectual property rights, and regulatory frameworks, enhancing the efficiency and competitiveness of Ethiopian businesses.
WTO membership often serves as a catalyst for structural reforms, such as improving business environments, reducing inefficiencies, and encouraging innovation.
Ethiopia would benefit from WTO provisions related to the trade in services, including access to global markets for sectors like finance, telecommunications, and education. This could help improve Ethiopia’s services sector.
Membership in the WTO could facilitate the transfer of technology and knowledge through international partnerships, helping Ethiopia improve its technological capacity.
Ethiopia’s agricultural sector, which is central to its economy, would benefit from improved market access to other countries. Ethiopia’s coffee, flowers, and other agricultural exports could gain better tariff access to global markets.
Ethiopia would be able to advocate for its agricultural interests in global trade discussions, ensuring that the country has the necessary safeguards and support mechanisms for its farmers.
Ethiopia could use its WTO membership to foster stronger trade relations within the African region, aligning its policies with regional trade agreements like the African Continental Free Trade Area (AfCFTA).
WTO membership would likely lead to greater integration with neighboring countries, boosting regional trade and contributing to Ethiopia’s economic growth.
By boosting trade and attracting investment, WTO membership could lead to job creation in various sectors, including manufacturing, agriculture, and services. This can help reduce unemployment and improve living standards.
Increased trade and investment would allow Ethiopia to diversify its economy, moving away from over-dependence on agriculture and developing sectors like manufacturing, services, and technology.
Ethiopia would have access to WTO’s technical assistance and capacity-building programs, which would help improve its trade-related infrastructure, strengthen trade policy, and develop its negotiating capacity.
Through the WTO, Ethiopia can train its officials in trade negotiations, trade law, and policy-making, enhancing the country’s institutional capacity in global trade.
WTO membership can push local businesses to enhance their competitiveness, as they will have to compete with international firms under fair trade rules. This can lead to higher productivity, innovation, and better quality of goods and services.
With access to new markets and competitive advantages, Ethiopia’s industries can expand exports, contributing to the country’s economic growth.
Ethiopia’s membership in the WTO could play a critical role in promoting economic growth, diversifying the economy, attracting foreign investment, and improving trade relations. It would help Ethiopia tap into global markets, modernize its trade policies, and ensure a more stable and predictable trading environment for businesses. The move could help the country realize its industrialization and development goals while contributing to greater regional and international integration.
What has Ethiopia accomplished so far to qualify or accession to the WTO? The author gives a brief outline on the preparedness of the country to join WTO. Since 2018, the country embarked on massive reform programs in all sector of the socio-economic and political spectrum.
The issuance of the Homegrown Economic Reform Policy pave the way for the expansion of the participation and leading role of both domestic and international private sector in the national economy.
Further expansion and diversification of the agriculture sector both in quantity and quality has enabled the country not only to produce bumper harvest of wheat but also for import substitution in cost recovery and food security.
The government introduced a bold macroeconomic policy which envisaged huge reforms in finance and monetary policies and determination of foreign exchange rate on market exchange. The government issued a new directive on the participation of foreign banks in the financial and banking sector, a measure that was issued for the first time to promote financial and economic liberalization.
A directive that allowed foreign companies to engage in retail and wholesale trade was also issued to open up extensive trade to foreign private investors. The government has conducted extensive activities in luring FDI which is growing in a promising pace in major sectors.
The manufacturing sector is also growing faster with the participation of local and foreign private companies in the Made in Ethiopia program. In the first nine months of the current year export of coffee and other agriculture products showed an increase both in quality and quantity.
Ethiopia is the only country in Africa which is implementing the policy and strategy of power integration in Africa by sharing clean hydroelectric power with Sudan, Djibouti, Kenya and for South Sudan and Tanzania in the current fiscal year. This clearly indicates that Ethiopia’s economic development is in line with African economic integration and the African Continental Free Trade Area and the strategies outlined by AU on Agenda 2063.
The macroeconomic reform program which was also geared towards fulfilling WTO requirements included correcting foreign exchange distortions and solving the structural balance of payments deficit problems. (2) Reducing inflation by modernizing the monetary policy framework. (3) Creating a favorable balance to achieve our national development needs through domestic capacity by solving debt vulnerability and increasing domestic Income. (4) Strengthening the Inclusiveness, competitiveness, and soundness of the financial sector. (5) Build a strong, inclusive, and sustainable economic system by improving government service delivery, addressing climate change, and ensuring food sovereignty.
A number of concrete interventions including the maintenance of macroeconomic stability, building a regulated and functional financial sector, creating efficient civil service based on skilled and effective human resources and legal framework and finally the promotion of modern infrastructural facilities including the construction of industrial parks were charted out as sub-strategies for the promotion of industrialization and the enhancement of the manufacturing sector.
A number of concrete interventions including the maintenance of macroeconomic stability, building a regulated and functional financial sector, creating efficient civil service based on skilled and effective human resources and legal framework and finally the promotion of modern infrastructural facilities including the construction of industrial parks were charted out as sub-strategies for the promotion of industrialization and the enhancement of the manufacturing sector.
A number of regulatory reforms like revisions in business registration, investment code and the modernization of the tax regime including value added tax were introduced.
By way of building the capacity of the manufacturing sector, focus was made on textile and leather industries for which various institutions were formed. Moreover, food, beverages, apparel constituted major export oriented manufacturing sectors.
The above measures taken by the government strictly considered the requirements of WTO accession and have enhanced the negotiating capacity of the nation.
Major Powers of the world including the US have already expressed their support for Ethiopia’s quest for joining the WTO. Ethiopia has already embarked on developing the Tourism Ethiopia program which will certainly add value to the promotion of the country as it wishes to finalize its registration over the next year.
BY SOLOMON DIBABAA
THE ETHIOPIAN HERALD FRIDAY 23 MAY 2025
