Ethiopia and EPA Negotiation 2008 - FES Ethiopia

The EBA regime provides duty free and quota free market access for all goods
from Ethiopia, with the exception of arms and ammunition. Under EBA, trade in
commodities such as sugar, rice and banana will be liberalized under a
transitional period. 33 This is a unilateral undertaking and is offered to all LDCs, its
terms are free to be changed by the EC at any time without consultation.
The EBA initiative is granted under the enabling clause of the GATT rules that
allow developed countries to have favourable preference systems for LDCs
without reciprocity. The critical difference between the EBA initiative and the
EPAs- and the Cotonou Partnership Agreement for that matter- in terms of trade
is that the EBA initiative is non- discriminatory as its preferences are accessible
globally to all least developed countries (LDCs) while the EPAs are just for ACP
countries. Further, EPAs envisage a wider level of cooperation other than just
trade.
Because of its generalized and non-discriminatory nature, the EBA initiative is
compatible with the WTO rules. Unlike the Cotonou Preference, compatibility
with WTO rules therefore is not an issue when it comes to the EBA Initiative.
If Ethiopia decides to opt out of EPA and retain the EBA preference, the decision
has some consequences in terms of future trade development and potential
development assistance.
6.2.1 EBA and Rules of Origin
Preferential market access under EBA is granted only when the conditions for
granting them are fulfilled. One obvious condition is the requirement that the
goods must originate from the countries that benefit from the preference
regime. The criteria which establish the origin of goods are mainly those that
33 Imports of sugar will only be liberalized by the year 2009.To be more precise, tariffs on rice
exported by LDCs will be reduced by 20% on September 1 st 2006,by 50% on September 1 st
2007,by 80% on September 1 st 2008 and will be eliminated no later than September 1 st 2009.For
rice and sugar, until duties are completely eliminated, a global duty-free quota is open for every
marketing year .The initial quotas for the 2001/2002 marketing year are fixed at 2517 tons for rice
and 74517 tons for sugar. For every subsequent marketing year, these quotas will be increased
by 15% in relation to the previous marketing year. Tariffs on sugar will be reduced by 20% on July
1 st 2006, by 50% on July 1 st 2007, by 80% on July 1 st 2008 and eliminated no later than July 1 st
2009.Tariffs on bananas are reduced by 20% per year starting from January 1 st 2002 and
eliminated no later than January 1 st 2006.The European Union will however carefully monitor
importations and in the case of massive increases could apply safeguard measures.
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