The Executive Idea Exchange Forum, based at the department of Management, was holding the "Executive Day" for the second time.
Presenters and panellists included Geremew Ayalew, director general for trade relations and negotiation at the Ministry of Trade; Yabowerk Haile, manager of Gash Micro Finance Institution; and Zemedeneh Nigatu, managing partner of Ernst & Young Ethiopia and head of Transaction Advisory Services. The almost gullible audience, which included members of the business community and academia and students of AAU, had a funny back and forth as Yabowerk made attention grabbing criticism against joining the World Trade Organisation and Geremew and Zemedeneh countered his argument with equal conviction.
The WTO, established on January 1, 1995, with its headquarters in Geneva, and no other offices anywhere else in the world, now has 159 member countries.Yemen is only waiting for the approval of its own parliament in order to join as the next.Ethiopia is one of 23 countries, seven of them least developed, with observer status.
This global body has five governing principles in the trade relationships that the member countries must adhere to: non-discrimination among members, predictability of the rules and regulation in place in a member country, transparency, freer trade through negotiation and national treatment.
Ethiopia's accession, that has dragged on for the past 10 years, may come to an end with its membership in less than two years' time, according to Geremew. So much seems to have been done so far.
It was an observer from 1997 to 2002, when it formally applied for accession and spent the following years until 2006 producing its MFTR (Memorandum of Foreign Trade Regime), which was distributed to members in January 2007. From then until 2011 they have been answering hundreds of questions, mainly from USA,Canada and EU, and once from Korea, who posed 168 questions. The questions keep coming.
To-date,Ethiopia have produced and submitted six documents; five are now ready for submission; one is prepared but under revision and two are currently under preparation.
These documents cover a host of issues, including agriculture, domestic laws, initial offers on goods, information on import licensing procedures and information on state trading enterprises.
The initial offers in services and subsidy notification are under preparation. All things that are in process, said Geremew, could be completed very soon.Ethiopia could become a member as early as 2014 - the year that will arrive in just over a week's time.
The WTO is all for the better, although Ethiopia has to work hard to take advantage of its potentials, Geremew says. The WTO has what is called the Lamy Test, which means that acceding to the WTO should make countries better off and not worse off.
Geremew cites China,Cambodia and Vietnam as the best examples of the benefit to be gained from WTO membership.
China's GDP per capita following membership grew from 1,021 dollars in 2001 to 7,600 dollars in 2010.Cambodia's GDP per capita grew from 404 to 795 dollars between 2004 and 2010 and Vietnam's from 843 in 2007 to 1,224 in 2010. On the contrary,Nepal's GDP per capita has fallen from 1,500 to 1,200 dollars between 2004 and 2010, while Cape Verde's got stuck at 3,800 from 2008 to 2010.
Despite the benefits stacked up for Ethiopia, Geremew says that the civil society was always opposed to WTO membership in all the forums they attended to share their views. This management meeting organised by the AAU was no exception.
Yabowerk said that he was a panellist in his own personal capacity not representing any civil society. And although he called his views a layman's opinion, he was effective in splashing water on the fire of membership ignited by Geremew and later by Zemedeneh.
The big economic powers were always clear about what they wanted and how they were going to get it. And that was the "absolute advantage theory" he mentioned, by which "each country concentrates on the commodity of its absolute advantage".
A long time ago, in the 1940s, when the WTO's predecessor, the GATT, was established, Africa's only independent country,Ethiopia, had an invitation to join. For a reason nobody knew, at least not those at the meeting, Ethiopia never accepted that invitation. Yabowerk argues that Ethiopia then made a choice for the best, and today's leaders should follow suit.
The WTO is not just a marriage of equals. It is a situation where countries such as Ethiopia simply have no chance to access the markets of bigger countries, while they open their vulnerable selves up for grabs.
The non-tariff barriers are many, and membership to the WTO is not going to affect them. He said there are import quotas, voluntary export restraints, various regulatory restrictions, dumping etc. He spoke of an African country, which he did not name, whose domestic chicken market was dying because of the import of frozen chicken. But Ghana and Uganda, according to reports, are among those countries whose domestic markets are affected with hundreds of millions of dollars worth of frozen chicken imports from Brazil.
The big economies subsidise their agriculture and exports, for example, he said, while Ethiopia, for instance, does not, and its exports had limited chance. The quality of packaging alone was enough to reject Ethiopia's exports.
Ethiopia has not been able to make the best of the AGOA (which Yabowerk suggested to be read as the American Growth Opportunity Act), EBA(Everything But Arms), the EPA (Economic Partnership Agreement) and COMESA.Ethiopia's performance in utilising these instruments is continuously improving, but in general it is below the desired level, he said.
"The major reason is supply side constraint and not demand side constraint. She never managed to supply the required quantity and quality to any of the common markets that she is a member of," he said.
The negotiations were also too complicated for Ethiopia to handle, in his opinion. In earlier years, Europe and America were interested in goods only. Later on, intellectual property rights started gaining prominence as the big powers found that they could use it to their advantage. He mentioned that what happened to rice in India and Pakistan could happen to teff in Ethiopia, for example.
Ethiopia could best benefit from the WTO if it could grasp well the complex and many agreements involved. In the WTO's legal framework alone he mentioned 18 agreements and rules on every topic - from tariff, agriculture and sanitation & phytosanitation to pre-shipment inspection, rules of origin and import licensing procedures.
The complication meant there were at least 10 awareness creation workshops organised for Ethiopia, and more to follow.
His arguments about Europe being after reclaiming its colonial heritage, Ethiopia not having competitive products even on its own domestic market and the intellectual enormity required for the negotiations, seemed to sway an audience that were inclined to believe that joining the WTO would harm Ethiopia.
Even as Zemedeneh tried to appear a practical person who believed in the facts and wanted Ethiopia to be ready for the inevitable, the crowd was widely hesitating as it heard the arguments on both sides.
The chairperson, Zewdie Shibre (PhD), said that he saw a light at the end of the tunnel when first hearing the opinion from Geremew. He said he no longer saw the light after hearing Yabowerk's argument. Hearing Zemedeneh's argument that Ethiopia would be better off for being a part of the global community, he admitted that now he was confused, bringing laughter from the participants.
Zemedeneh would be the one to get wild applause as he brought the case of how Ethiopian Airlines stopped underselling itself and started aggressively expanding making more money in four years than it did in 57 and becoming the largest airline in Africa - one that went around the content on a shopping spree buying other airlines.
He said that he had dined with Pascal Lamy, the former WTO director general, a few months ago, and had "grilled" him about wha tEthiopia, already growing at six percent, could benefit from membership. The only answer that he found acceptable, he said, was that Ethiopia had no choice but to belong as every other country was doing so.
"The big guys are already members, so who are we to stay out," he said in a comment, adding that like it or not Ethiopia was becoming a member in about 18 months because the government had decided that it would be so.
Geremew reassured his audience that Ethiopia would not be forced to open up any sector and had considerable liberty to negotiate tariffs. It would be easy, he added, for Ethiopia oined the WTO now, while it is still a least developed country, rather than in 10 years when, if the government has its way, it will be a middle income country without much of the benefits it could get as a least developing country (LDC).