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