Ethiopia and EPA Negotiation 2008 - FES Ethiopia

this case Ethiopia may want to consider the effects of not initialling; as if the IA is
extended in duration it would be unwise to miss out on any EPA related
development aid. This is especially true if initialling the IA does not ‘cost’
anything in terms of market liberalisation.
If the IA is to be extended in duration it could also be beneficial to consider
submitting a market access offer to take advantage of the considerably better
rules of origin available under the IA. The rules of origin available under the EBA
regime is based on a much more inflexible and punitive approach, relying on
value addition and the threat of preference removal if documents are
considered to be inaccurate. The benefits to neighbouring countries industries in
the long term, which operate under the IA regime, over the EBA regime could
have a considerable impact on certain Ethiopian economic sectors such as
textiles.
In the case that the IA is extended there is nothing to stop Ethiopia signing the IA
and making a market access offer. Article 4 (g) states that LDCs can submit tariff
offers after the signing of the IA on the same or flexible conditions. This allows for
the flexibility that may be needed to conclude a market access offer that is in
Ethiopia’s interest. It is also worth noting that Article 62.7 & 8 allow denunciation
of the IA in writing with one months notice. Therefore if the IA was considered to
be failing the interests of Ethiopia, it could easily be rejected and Ethiopia could
withdraw quickly from the treaty.
The IA therefore can easily be signed and the trade chapters joined later with
little impact on the Ethiopian economy in the short term. However, it would allow
Ethiopia to take advantage of any development cooperation that may be
available in the short term. It would also allow Ethiopia to consider making a
market access offer in the course of the IA, which may be beneficial in the long
run. Access to the European market for Ethiopian goods is still important with 30%
of exports going to the EU.
6.2 EBA as a permanent solution
This option assumes that Ethiopia will sign neither the Interim nor the
comprehensive EPA. Not-signing means that Ethiopia will be trading with the EU
under the EBA regime. Therefore the EBA regime has to be examined for its
value to trade and development and its long term viability.
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