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Members of the Ethiopian Chamber of Commerce and Sectoral Associations (ECCSA) stated their concern over the fast pace Ethiopia has taken to become a member of the World
Trade Organization (WTO), saying it is premature. They requested the government to first level the playing field before opening the doors wide; otherwise, they declared that they wouldn’t be able to compete with well-established foreign companies with financial muscle.
In 2003 Ethiopia set in motion the process to become part of the WTO, the only entity which deals with trade between nations. Since then, the country, with the assistance of the organization’s Secretariat in terms of multiple trainings for a smooth accession, has made a big effort to prepare for the accession.
The accession is expected to create job opportunities for citizens, increase Foreign Direct Investment (FDI) and create additional markets for Ethiopian products.
At the 4th Regular Consultation Forum of ECCSA members held at the Hilton Hotel on June 5, Lisanework Gorfu, Director of the Multilateral and Trade Negotiation office at the Ministry of Trade (MoT), reported on the progress of the accession plan saying it was going well. He also mentioned that the participation of the private sector was minimal and not as expected.
He explained that the government has so far protected the market for the wellbeing of the Ethiopian private sector. He indicated that the country is getting much closer to attaining membership and that the private sector should state its position. “It would be very difficult to finalize the process without the private sector’s involvement,” he said. The private sector, one of the three major components of trade together with the legislature and the executive, makes a big contribution to the country’s economy, and stakeholders need to be actively involved, he added.
Lisanework further noted that the private sector is only participating through the Public Private Dialogue (PPD), which is not good enough or sufficient, and should be included in the negotiations. “The Ministry of Trade (MoT) is the only party making the negotiations for accession, which makes things very difficult all around. Dialogues have been conducted, but they have to be strengthened, as the private sector’s direct involvement will provide inputs as to what it needs and its requirements are during the negotiations,” he said. “The government should also avoid commitments that would harm the private sector. It is the private sector’s right to participate and make its case.”
Representatives of members of ECCSA said the private sector is weak compared to that in other corners of the world and cannot adequately compete with them if the accession process is completed hastily.
According to a participant, currently Ethiopian private sector is barely able to survive, due to the various problems of access to land, construction, inability to purchase machineries and materials for lack of finance, redundant and unfair taxation, and market promotion challenges. Furthermore, the sector is afflicted with a shortage of foreign currency. “It is very difficult to run established factories due to the shortage in foreign currency,” he said. “We have to wait six to seven months to receive foreign currency for our existing factories, let alone to construct new ones.”
Attendants of the forum claimed that, with all these problems, completing the accession to the WTO will severely affect the performance of the few existing companies. Another participant said that there are practically no industries literally capable of competing with foreign companies in the country. “Forget the industry. In my opinion, even the agriculture sector is not that productive or efficient,” he stated.
He also cautioned that the hasty completion of accession to WTO will open doors to make the country a dumping ground for products made abroad. “I am not saying we don’t want membership, but our problems have to be looked into and resolved before this happens, and the private sector should be actively involved in the process,” he argued.
Currently, there are 157 member countries of WTO. Thirty four of these are least-developed countries (LDCs). Twenty four other countries, including Ethiopia, are observers. Thirteen states, including Eritrea, North Korea, Somalia and other small islands, are not members of the organization.