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Viewing cable 06ADDISABABA1954, ETHIOPIA: TRADE MINISTER CONFIDENT OF SUBMISSION

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Reference ID Created Released Classification Origin
06ADDISABABA1954 2006-07-18 06:28 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Addis Ababa
VZCZCXRO1587
PP RUEHROV
DE RUEHDS #1954/01 1990628
ZNR UUUUU ZZH
P 180628Z JUL 06
FM AMEMBASSY ADDIS ABABA
TO RUEHC/SECSTATE WASHDC PRIORITY 1603
INFO RUCNIAD/IGAD COLLECTIVE PRIORITY
RUEHGV/USMISSION GENEVA PRIORITY 3841
UNCLAS SECTION 01 OF 02 ADDIS ABABA 001954 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR AF/E 
DEPARTMENT PASS TO USTR 
DEPARTMENT PASS TO USAID 
 
E.O. 12958: N/A 
TAGS: ETRD ECON EAGR ET
SUBJECT: ETHIOPIA: TRADE MINISTER CONFIDENT OF SUBMISSION 
OF THE FOREIGN TRADE REGIME MEMORANDUM BY THE END OF THE 
SUMMER 
 
REF: ADDIS ABABA 1138 
 
SENSITIVE BUT UNCLASSIFIED-- PROTECT ACCORDINGLY 
 
1. (SBU) SUMMARY.  Trade and Industry Minister Girma Birru 
assured the Charge on July 13 that the Government of Ethiopia 
(GOE) is fully committed to WTO accession and plans to submit 
the Memorandum on the Foreign Trade Regime (MFTR) no later 
than the end of August.  Minister Girma stressed that there 
were no political objections to WTO accession from Prime 
Minister Meles or members of the Cabinet.  Thus, no USG 
intervention was needed on this front. Minister Girma showed 
a strong understanding of the accession process and stated 
that the benefits to Ethiopia from WTO accession included 
increased support for trade capacity building and enhanced 
investor confidence.  While Minister Girma stressed that 
there were no objections to WTO accession at the political 
level, he noted that some elements in the private sector 
remained resistant to change and skeptical of the benefits of 
joining the WTO.  Minister Girma described his recent visit 
to Washington for the AGOA Forum as very positive and agreed 
that Ethiopia could be taking greater advantage of AGOA.  He 
complemented USAID on its livestock initiative and requested 
a similar program for the coffee sector.  END SUMMARY. 
 
2. (U) Charge called on Trade and Industry Minister Girma 
Birru on July 13 to obtain a read-out on his recent visit to 
Washington and inquire about the status of the Memorandum on 
the Foreign Trade Regime.  She was accompanied by Econoff 
(notetaker) and USAID WTO Accession Project Chief of Party. 
 
 
GOE COMMITTED TO WTO ACCESSION AT THE HIGHEST LEVEL 
--------------------------------------------- ------ 
 
3. (SBU) Minister Girma stated that the GOE was fully 
committed at the highest level to WTO accession.  Any past 
concerns about joining WTO had been resolved. The MFTR, which 
was submitted to the Council of Ministers for approval in 
early 2005 (reftel), is currently circulating among various 
Council departments.  Girma stated that he had personally 
brought the MFTR to the attention of the Prime Minister and 
was working directly with the Prime Minister's Office on 
moving the MFTR forward.  The goal is to have the MFTR 
approved by the Council and submitted to Geneva no later than 
the end of August.  He noted that no USG intervention was 
necessary to move the process forward, since the GOE was 
fully committed to WTO accession.  Girma appeared confident 
that the MFTR would be submitted by the end of the summer. 
(NOTE: In a recent interview in "Fortune," a leading Addis 
Ababa-based weekly economic newspaper, Prime Minister Meles 
stated that the Cabinet would be reviewing the MFTR by the 
end of the summer.  This is one of the few occasions that the 
Prime Minister has spoken publicly about WTO accession.  The 
Prime Minister has also signaled his commitment to WTO 
accession in talks with the Charge.  END NOTE.) 
 
4. (SBU) Speaking on the costs and benefits of WTO accession, 
Girma highlighted capacity building support, particularly in 
the areas of sanitary/phyto-sanitary standards (SPS), and 
increased investor confidence as the principal benefits. 
Given the preferential access that Ethiopia currently enjoys 
to both the US and EU markets, Girma was skeptical of any 
trade-related benefits from WTO membership.  Rather, he 
stated that Ethiopia wanted to be "part of the club" and had 
nothing to gain by not joining.  Our message that WTO 
accession can support Ethiopian exports by providing 
protection for exporters did not seem to resonate as much as 
the prospect of greater trade capacity assistance.  Girma 
expressed appreciation for USG technical assistance on WTO 
accession, and stated that in the future, the GOE would be 
looking for broader support from donors.  (NOTE: While the 
USG is the only donor currently reviewing existing laws and 
regulations, there is strong donor cooperation on WTO 
accession.  END NOTE.)  According to Girma, it is some 
elements of the private sector, particularly the Chambers of 
Commerce, that remain resistant to WTO accession. 
 
 
AGOA FORUM BENEFICIAL, BUT ETHIOPIA COULD DO MORE 
--------------------------------------------- ---- 
 
5. (U) Girma spoke positively about the recent AGOA Forum in 
Washington, though he expressed disappointment that more US 
businesses were not present at the various events. 
 
ADDIS ABAB 00001954  002 OF 002 
 
 
Recognizing that Ethiopia was not taking full advantage of 
AGOA, he told the Charge that Ethiopia needed to support a 
broader range of products.  To this end, he has directed his 
staff to study and identify products or sectors that have 
potential under AGOA.  Cut-flower exports to the US market, 
for example, were constrained by cargo limitations. 
Increased air cargo exports from the US could serve to 
elevate this problem.  Girma cited foreign exchange 
constraints due to higher oil imports as a significant 
challenge for businesses.  Increasing power generation and 
attracting foreign direct investment were also named by Girma 
as key determinants for sustainable growth.  He expressed his 
appreciation and satisfaction, and that of the Deputy Prime 
Minister, for USAID's livestock initiative, and requested 
that this type of program be replicated for the coffee 
sector. 
 
6. (SBU) COMMENT.  Minister Girma's assurances about the 
GOE's commitment to WTO accession at the highest level, 
combined with his confidence about the submission of the 
MFTR, were highly encouraging.  Although Girma has made 
similar commitments about the submission of the MFTR in the 
past, the fact that the Prime Minister appears to be fully 
supportive of the process is a major step forward and gives 
Post confidence that the MFTR will in fact be submitted. Post 
is aware of private sector concerns about the impact of the 
WTO accession on local business, and will continue to work 
with the private sector, including the Chambers, to both 
educate them about the process and help create a more 
competitive commercial environment.  Post has also begun to 
actively engage the Parliament: USAID's WTO Accession Project 
recently conducted a WTO training workshop with ruling party 
and opposition MPs in May.  We will also continue to dialogue 
with high-level GOE officials to ensure that that they fully 
understand the trade benefits, including to exporters, of WTO 
accession.  END COMMENT. 
HUDDLESTON