Ethiopia and EPA Negotiation 2008 - FES Ethiopia

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Lifting the export tax will considerably undermine the production capacity of Ethiopian tanneries. All the tanneries are currently working under their full capacity because of the critical shortage of raw hides and skins. Lifting the export tax while there is this evident shortage of supply will lead to closure of more than half of the tanneries. Similarly, eliminating the export tax would arrest the transition to export of value added products. 5.4 Scope of Liberalisation Free Trade Agreements by definition restrict states’ freedom to manoeuvre – that is their intention. Countries choose between the advantages of constraints to other countries’ policy freedom and the disadvantages of constraints on their own when they negotiate any trade deal. Arguably, the single largest loss of policy space that takes place when each country joins an FTA or the WTO is the loss of freedom to impose custom duties or vary them, as the case may be. However, this doesn’t mean there are no flexibilities. For instance, in the current Doha negotiations LDCs are exempted from having to make any market access concessions. Under the Interim EPAs, countries are required to allow a minimum of 80% of EU imports to enter duty free with a period of 25 years. For the ESA countries, the transitional period is only 15 years. In the EAC Interim EPA-which includes four LDCs, 82% of the region’s import from EU will be liberalised. 62% will be liberalised within 2 years, and 80% within 15 years and only the final 2% within 25 years. There is no justification or even claim that these concessions are designed to be consistent with the countries development needs. The EC’s one –size- fits –all approach of requiring liberalisation of a minimum of 80% of import from EU within a transition period of 25 years doesn’t even make a distinction between LDCs and developing countries. The market access commitments in the interim EPAs are out of proportion to what is being requested of LDCs in the Doha Round although admittedly the Doha Round is not a free trade negotiation. Obviously, as the scope of the liberalisation widens the revenue loss from tariff collection increases. This is significant given the stage of development of most of these counties. This will be an added burden given the weakness and administrative difficulty in collecting o internal taxes and will affect the government’s expenditure for other objectives such as health and education. 5.5 Prohibition of the Use of Quantitative Restrictions Article 17 of the ESA Interim Agreement provides that “except as specified in the Annexes, all prohibitions or restrictions in trade on the importation, exportation or 20 | P a g e
sale for export between the parties other than customs duties, taxes, fees and other charges whether made effective through quotas, import or export licenses or other measures, shall be eliminated upon the entry into force of this Agreement. No new measures shall be introduced.” This provision is directly copied from Article XI of GATT. However, unlike GATT, this provision doesn’t exhaustively list the possible exceptions such quantitative restriction that might be taken to prevent or relieve critical shortages of foodstuffs or other essential products. The GATT provision also allows other exceptions. On this particular issues, The EAC text is better as it includes a paragraph stipulating that the prohibitions on quantitative restrictions shall not extend to export restrictions in place to address food shortages. The Ethiopian government currently maintains a number of restrictions both on import and export trade. Export of cereals, for example, is prohibited to prevent shortage of foodstuff and to fight inflation. Importation of a number of items such used clothing; denatured alcohol, organic fertilsers, and seeds with terminator gene technology are prohibited. The government might also want to maintain this policy flexibility to introduce measures of similar nature in the future. The exception that Article 17 of the ESA text provides doesn’t seem enough to accommodate this. 5.6 Implementation of the Customs Valuation Agreement Article 24 of both the EAC and ESA text provide that Article VII of the GATT 1994 and the Agreement on the implementation of Article VII of the GATT 1994 shall govern customs valuation rules applied to reciprocal trade between the Parties. According to the Customs Valuation Agreement, customs value is deemed to be the price actually paid for a good with the invoice value considered as a true representation of this value. However, is not acceptable in cases where it is deemed that the invoice value does not reflect the actual value of the good. The Customs Valuation Agreement expressly prohibits the following valuation methods: (a) the selling price in the country of importation of goods produced in such country; (b) a system which provides for the acceptance for customs purposes of the higher of two alternative values; (c) the price of goods on the domestic market of the country of exportation; (d) the cost of production other than computed values which have been determined for identical or similar goods in accordance with the provisions of Article 6; (e) the price of the goods 21 | P a g e
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Page 3 and 4: References ........................
Page 5 and 6: Unilateral preference programs not
Page 7 and 8: Cotonou Agreement. The Cotonou Agre
Page 9 and 10: egional trade arrangements envisage
Page 11 and 12: 4. Content of the Interim EPAs As o
Page 13 and 14: country inputs in such key areas as
Page 15 and 16: African LDCs signed the Interim EPA
Page 17 and 18: the policy space of developing coun
Page 19: have the audacity to claim otherwis
Page 23 and 24: goods involved in the fraud and imp
Page 25 and 26: instruments remain to be negotiated
Page 27 and 28: 6.1 Initialling/ acceding to Develo
Page 29 and 30: The EBA regime provides duty free a
Page 31 and 32: etween the EU and Ethiopia as these
Page 33 and 34: cost. It should also be noted that
Page 35 and 36: different documentation requirement
Page 37 and 38: negotiation on the Full EPA with EC
Page 39 and 40: The final outcome of the EAC-EC EPA
Page 41 and 42: and eastern African countries. Harm
Page 43 and 44: 7. Conclusion: Key Issues Ahead The
Page 45 and 46: importance of technical cooperation
Page 47 and 48: the framework rules on procurement
Page 49 and 50: addressed since most of the CARIFOR
Page 51 and 52: References 1. Agritrade, EPA Negoti
Page 53 and 54: 19. Roberta Piermartini, The Role o
Page 55 and 56: Scope of Application Article 6 Clas
Page 57 and 58: Relations between this Agreement an

Ethiopia and EPA Negotiation 2008 - FES Ethiopia

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