Two foreign firms have been selected by the Ministry of Trade and Industry to study Ethiopia's finance and telecom sectors, in order to help Ethiopian trade negotiators enter the accession process at the World Trade Organization (WTO), equipped with arguments that these sectors should remain sheltered from competition for at least eight years.

The German BKP has signed an agreement with officials at the Ministry, on December 16, 2006, to conduct an assessment on the impact of opening the financial sector to foreign competition, while the American Nathan Associates has been contracted to study the impact of liberalizing the telecom sector. These agreements will, however, come into effect after a node is given by the World Bank, financer of the 2.6 million Br to be paid to both companies.

Sheltering the two sectors from foreign competition is dear to the Ethiopian government, at a time when the country is poised to enter negotiation with members of the WTO.

Ethiopia's application to membership, submitted in January 2003, was accepted a month after the same year where a working party was formed under the chair of United Kingdom. Although the government was scheduled to submit a memorandum of foreign trade regime outlining all its laws and regulations affecting trade within a year, as well as various tariff levels. Prepared by a 15-member technical committee comprising members from the National Bank of Ethiopia, the Ethiopian Customs Authority, Science and Technology Commission, as well as Ministry of Finance and Economic Development, the 110-page document was submitted by Girma Birru, chair of the ministerial committee on the issue, to the Council of Ministers in October 2004.

It took another two years when the Council approved the document in November of this year; it was accepted with strong reservations. The Council has agreed with the document only after attaching strong conditions that those trusted with trade negotiations with WTO member countries should ensure that the country will be granted a relief period of eight years to keep its status quo when joining the club.

These negotiators, to be led by Minister Girma, who created a department specializing in WTO, would like to have ammunitions to persuade others why it is important that the country keeps its financial and telecom sectors at bay from foreign competition. After securing a 300,000 dollars grant from the World Bank, the Ministry had issued an international tender to select qualified firms that would conduct impact assessments on both sectors. Eleven companies responded to the announcement, including two local companies, whose identity remains undisclosed.

Trade negotiators hope that the result of these assessments and recommendations from the firms, to be completed in two months, will help them engage interested parties in WTO who would raise questions and demand explanations.

"We look forward to get justifications on why we should be granted these eight years," said a staff member of the WTO Department within the Ministry.

The studies will also help the government understand the pros and cons of opening the sectors to foreign investment, according to this staff member.

The working group, formed in the WTO, will translate Ethiopia's memorandum of foreign trade regime into French and Spanish to be distributed, in a week, to all 149 member countries, including neighbouring Djibouti and Kenya.