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Pressure piles on Ethiopia to lift trade barriers

Nairobi: Comesa states have stepped up pressure on Ethiopia to lift administrative barriers that stifle trade within the bloc. In a move insiders said symbolised growing frustration over Ethiopia’s restrictive trade practices, a ministerial delegation from partner states of the Common Market for Eastern and Southern Africa last week paid a visit to Addis Ababa for talks with their trade and finance counterparts.

'The purpose of the visit was to follow up with Ethiopia on the implementation of Comesa programmes and consult on different policy decisions regarding Comesa integration,' the secretariat said in a statement confirming the trip to Ethiopia.

Though a member of Comesa, Ethiopia has lately found itself at loggerheads with other partner countries over restrictions to its markets.  In the latest incident, Ethiopia has introduced price curbs to tame run away inflation, triggering protest among Comesa partners such as Kenya who vouch for a free market policy.

Ethiopia imposed price controls on about 20 essential commodities, pushing costs of goods down five to 45 per cent and those who violate the rules are liable for up to 15 years imprisonment.

Late last year, Kenya raised the red flag over Ethiopia’s restrictive trade practices and urged the Comesa secretariat to arbitrate in a dispute over a list of products legible under a special cross-border trading scheme.

Trade permanent secretary Abdulrazaq Ali claimed Ethiopia had failed to honour its pledge to reach a deal with Kenya on a list that would be covered under the Comesa Simplified Trade Regime (STR).

'We therefore wish to appeal to the Comesa secretariat to look into the matter with a view of convening a bilateral meeting to discuss and agree on the list of traded products to be covered,' he said in November.

In the new Comesa STR, traders would be granted simplified certificates of origin to enable them enjoy duty and quota free access as long as their goods appear on a list of agreed products. The certificates would be filled in by traders at designated border posts and stamped by customs officials upon verification.

For purposes of health and safety, those carrying chemicals, agricultural foods, plant and animal products would, however, have to report to offices of the ministries of Health, Environment and Agriculture for clearance.

'This is important to guard against the spread of pest and diseases and to protect human lives as well as the environment,' a manual on the STR reads in part.

But only small-scale border traders with consignments valued at $500 or less will be eligible to use these simplified certificates of origin.

Traders handling larger consignments who wish to benefit from duty-free access will be required to use the normal Comesa certificate of origin.

Except for Ethiopia, all countries neighbouring Kenya have agreed on a list of products to be covered under the Comesa STR programme.

Records showed that the common lists of products already endorsed to be traded under the STR agreed upon will apply on the following borders; Burundi/Rwanda, Rwanda/Uganda, Uganda/Sudan, Uganda/Kenya, Kenya/Sudan, Zambia/DR Congo and Rwanda/DR Congo.

A preview of the common list approved by the ministers for use under the new Comesa STR arrangement showed that agricultural product traders would be the biggest beneficiaries.

The products on the list include beverage crops such as tea and coffee; maize, wheat and sorghum, cotton, sisal, fish and fish products as well as raw milk.

Other listed products include livestock and livestock products, fruits, nuts, oil seeds, poultry and poultry products, vegetables, root crops as well as sugar cane.

The list is, however, expected to be further expanded to include a range of finished products that had been left our of the initial roll.

More manufactured products would be uploaded onto the list once they are assigned the appropriate harmonised system codes (HSC).

Insiders said Ethiopia’s reluctance to reach a deal over the STR coupled with other practices such the newly introduced price controls forced the visit to Addis Ababa by the Comesa ministers including the bloc’s chairman Sindiso Ngwenya.

'Ethiopia continues to act in disregard to the spirit of Comesa. Time has come for the leadership to be reminded to play within the spirit of regional integration instead of adopting policies and measures that affected economic growth,' a senior official at the Trade ministry in Nairobi said.

The delegation said the host country had not made sufficient progress towards joining the market bloc’s free trade area (FTA) despite assistance to do so.

But Ethiopia’s Finance minister Sufian Ahmed however said his country was committed to integrating within Comesa and denied there was political pressures preventing them from joining the Comesa FTA.

Ethiopia challenged the Comesa secretariat to help it conduct a new feasibility study on what impact the regional FTA would have on its economy.

8 February 2011
Business Daily Africa
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