ETHIOPIAN TRADE MINISTER DISCUSSES WTO ACCESSION

UNCLAS ADDIS ABABA 002339 SENSITIVE SIPDIS DEPARTMENT FOR EEB/IFD/OMA - JWINKLER AND EEB/CBA - DWINSTEAD DEPT PASS TO USTR FOR PATRICK COLEMAN, CECILIA KLEIN, AND BARBARA GRYNIEWWICZ DEPT OF COMMERCE WASHDC FOR ITA MARIA RIVERO DEPT OF TREASURY WASHDC FOR REBECCA KLEIN E.O. 12958: N/A TAGS: ETRD EINV ECON PGOV ET SUBJECT: ETHIOPIAN TRADE MINISTER DISCUSSES WTO ACCESSION AND AGOA REF: ADDIS ABABA 01977 ¶1. (SBU) Ethiopia's Minister of Trade and Industry (MoTI) Girma Birru discussed World Trade Organization (WTO) and African Growth and Opportunity Act (AGOA) issues with CDA, Pol/Econ Chief, and EconOff during a September 22 courtesy call meeting. Birru stated that MoTI is working closely with USAID on the WTO accession process and is waiting for the WTO to schedule the second working party meeting dates. Birru added that there is a new WTO chairperson overseeing Ethiopia's accession and emphasized that all requested documents have been submitted to the WTO. He confirmed that any liberalization of the telecommunications or financial sectors would only be done if it would help the domestic economy. Birru said Ethiopia needs to work within its capacity and will ask WTO negotiating partners for a timeline that is in line with the country's capacity. Specific to the financial sector, Birru expressed concerns about the ability of the National Bank of Ethiopia (central bank) to regulate a liberalized market. On the telecommunications side, he opined there was more of a management problem and hoped all customer needs would be fulfilled by the Chinese-led partnership with the Ethiopian Telecommunications Corporation. CDA expressed full support for WTO accession efforts, but encouraged more rapid liberalization, particularly in the financial and telecommunications sectors. ¶2. (U) In terms of exports to the United States, Birru highlighted Ethiopia's focus on increasing footwear exports. He said that both USAID and the World Bank have supported these efforts and sample orders from three to four Ethiopian companies are currently in the works. In regards to AGOA, Birru remarked Africa has yet to take full advantage of this "generous program" offered by the USG, but noted Ethiopia's AGOA exports are rising despite the global financial crisis. He went on to say duty-free access to the U.S. market may not be the most important factor hindering Ethiopia's export growth. Birru cited issues of poor infrastructure and low labor productivity as areas where Ethiopia needs assistance in order to be more competitive globally. ¶3. (SBU) Comment: As an economist and experienced Minister, Birru is well versed in trade issues and the specifics of AGOA. He proudly commented that he had attended every AGOA forum since its inception. Embassy officials have heard unofficial rumors that Ethiopia would like to host the next AGOA forum on African soil; however, post is not aware of an official request of this nature. Clearly, Birru is engaged on taking advantage of AGOA benefits, but does not see it as a long-term solution to increasing exports and even made the remark that AGOA would have to be "WTO compatible at some point." As far as liberalizing the telecommunications or financial sectors, Birru sought to preempt the discussion, raising the topic but in essence echoing the same "lack of readiness" arguments as Prime Minister Meles Zenawi did during his August 2009 meeting with U.S. Trade Representative Ron Kirk (reftel). The Government of Ethiopia continues to be cautious in its approach to liberalization of these sectors and will most likely ask for a generous timeline from the WTO as it attempts to integrate with the global economy. End Comment. MEECE