Ethiopia’s Journey towards the World Trade Organization


International trade is the exchange of goods and services across national borders. The process and engagement of trade has evolved from a direct exchange of goods or bartering to precious metals, and now into a sophisticated economic growth stimulator for countries throughout the globe.

The modern medium of exchange is money. This medium is exchanged and monitored by advanced monetary systems. Bilateral and multilateral trade exists among nations because different regions have competitive advantages and different countries have different natural resources, technologies and services.
Even though the history of trade goes way back in time, its socio-economic and political significance has increased in recent centuries due to several factors, such as industrialization, multi-national cooperation, globalization, telecommunication and transport infrastructure. In most countries trade is a significant part of the Gross Domestic Product (GDP). It is highly unlikely for a nation to live without trade in this century which is the pillar upon which economic communities are built.
The international organization that deals with global rules on trade is known as the World Trade Organization, or with its more famous acronym, WTO. As FIFA is for World football, so is WTO for trade. The main functions of the organization include trade negotiations, dispute settlement, building trade capacity and monitoring commerce between nations. It insures that trade flows as smoothly, predictably and freely as possible. This giant international organization was established in 1995 as a result of negotiations at the Uruguay Round. Headquartered in Geneva, Switzerland, the organization has so far admitted about 157 nations since its establishment.
Before a country becomes a full member of the WTO, ratifying the complete membership package is compulsory. These agreements are negotiated and signed by the World’s trading nations and ratified by their parliaments.
Even though Ethiopia is actively involved in the WTO accession process, the country is yet to become a member of this important organization. Some of the terms and conditions set by the organization are hard to achieve and the country is working hard to meet the requirements to realize the long-awaited admission to the WTO.
The Director General of WTO, Pascal Lamy, held talks with the Ethiopian Prime Minister Hailemariam Desalegn and Ethiopian Minister of Foreign Affairs, Tedros Adhanom, with the intent of accelerating the negotiation process. According to speculations, Ethiopia might join the trade organization in 2014.
Since trade, commerce and financial transactions are highly indispensable to the economic growth of a country, I believe Ethiopia will benefit by joining the WTO, therefore, it would do what it takes to accelerate the negotiation process. Ethiopia has become one of the fastest developing countries in the World and has been able to maintain double-digit growth since 2003.
The foundation for modernizing Ethiopia’s trade and the relationships it has with its trading partners has already been laid. However, among other things, joining the WTO would help Ethiopia tackle its long history of trade deficit to a certain extent.
Becoming a full member of the WTO would also help Ethiopia handle disputes constructively and equitably in addition to gaining access to a variety of services and quality products to select from. On top of that, the rules of trade engagement create suitable conditions for Ethiopia to trade with other nations in a safe and secure environment.
Among the requirements that needs to be met, one is intellectual property rights protection, and the Country is working on addressing this issue. The Ethiopian government is committed and fighting such piracy with complete determination, because it is one of the countries in the World with a huge problem when it comes to intellectual property rights. For instance, trade infringements of major international brands are observed all around Addis Ababa, brands such as Inter Continental and Pizza Hut, to name but a few.
Investment barriers for foreign investors are one of the issues expected to cause a bump in the on-going negotiation process. The Ethiopian government has restricted banking, insurance and microcredit industries only for domestic investors. Foreign investors can participate in the telecommunications sector in partnership with the government only.
The other major area that the government might be required to improve on is the Judicial System. Many international companies and organizations complain about the lack of experience and inadequate staff in the Judicial System.
In general, joining the WTO will give a boost to maintain the fast economic progress of the country. The organization would provide technical assistance and other supports which, in my opinion, is what a developing country like ours is in need of.