Two years after submission and three months after a stern reminder from Minister Girma Birru of Trade and Industry, the Council of Ministers last week finally approved the Memorandum of Foreign Trade Regime (MFTR), the prerequisite for Ethiopia’s accession to the World Trade Organisation (WTO).

The WTO gave the nod to Ethiopia in January 2003 to submit the document, which comprises the country’s policies, laws and regulations and the procedures of their implementation on trade, finance, agriculture as well as intellectual property rights.

The Organisation also formed a working part in February, led by N. McMillan, Britain’s Ambassador to the WTO, to facilitate exchange of documents between Ethiopia and other countries as well as any discussions that countries may want to engage with Ethiopia based on the document.

A Technical Committee of 15 officials drawn from the Ministries of Finance and Economic Development, Trade and Industry, Revenue, and Foreign Affairs, as well as from the National Bank of Ethiopia, the Customs Authority and the Science and Technology Commission delivered the final version of the MFTR document in October 2004 to the Council, where it had been languishing for over two years.
 

Sources told Fortune that at the Council meeting on November 10, the day the approval was made, the most heated debate was between Prime Minister Meles Zenawi, Foreign Minister Seyoum Mesfin and Girma Biru, with Kassu Yillala, minister of Works and Urban Development making modest participation. The rest were just listening to the others all the time.

The major issue of debate was the financial sector, which WTO members are required to open up for foreign investment, with a window period of eight years for developing countries, provided they can offer convincing excuses to request the period from different countries. Ethiopia’s current policy closes the door to foreign investment in the sector, and the debate was how Ethiopia could proceed with its quest for membership under that circumstance.

“What will we do if we are asked to open up the sector against our views and policies?” was reportedly the Prime Minister’s question, to which Girma’s response was that the sector would not remain closed forever. 

The question was not resolved at the meeting. The Council decided to keep the issue open for eight years, providing the strong and convincing reasons the WTO wants to hear.

“Ethiopia is the only sub-Saharan country that has not admitted foreign banks,” said a finance expert. “It is better for Ethiopia to open up and try to become a member rather than closing the door and trying to argue.”
 

He said that Ethiopia will otherwise need to assign professionals with logic, reason and capacity to present the country’s case against opening up when the eight year period is over.
 

The other hot issue for the Council was customs duty and tariff, which Ethiopia may be demanded to lower. It has been agreed to begin by offering higher rates which would be gradually decreased through negotiation.
 

The WTO office at the Ministry of Trade and Industry has been instructed to work with the Ethiopian Development Research Institute (EDRI) in handling financial negotiations. EDRI’s director is Neway Gebreab, the Prime Minister’s chief economic advisor.
 

The MFTR document holds information up until 2003; the Technical Committee has been authorized by the Council to update it to 2005 and submit it directly to the WTO; this could happen by December 2006. Then the document will be translated in to the WTO’s working languages, English, French and Spanish.
 

There will follow five years of negotiations before Ethiopia could become a full member of the WTO by about 2012.