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Free trade deal will cost Ethiopia, warns researchers | 07/06/09

Free trade deal will cost Ethiopia, warns researchers

By Addis Mulugeta

Although women constitute a large share of the Ethiopian society, they have suffered from inequality in economic, political, social and cultural life.

A group of people and organisations are arguing that this situation will be exacerbated if Ethiopia signs an Economic Partnership Agreement (EPA) with the EU.

EPAs are essentially a free trade agreement, which aims for the long term reduction of barriers to trade, such as quotas and tariffs. Currently, the Ethiopian Government is debating whether to sign the agreement, as it has expressed concerns about the effect it will have on its fragile industries.

On Wednesday, researchers presented papers on the social challenges Ethiopia would face if the EPA was signed, during an event organised by the Agency for-Cooperation and Research in Development (A.C.O.R.D) Ethiopia at Desalegn Hotel.

One of the researchers, Dr. Fekeremarkos Merso, indicated that EPA has different effects from the gender perspective because of the differences in the roles, responsibilities, rights and opportunities that society assigns to men and women, particularly in Africa.

In this case, women workers mainly in developing countries are concentrated in jobs which bring low earnings. This creates structural barriers to women’s access to education, training, land and productive assets, restricts women time and mobility for productive work and limits their choice of income-earning activities.

The paper further indicated that trade liberalisation could impact on access to income earning opportunities ; access to education, information, and training ; access to ownership and use of assets and productive resources, including credit and technical assistance ; effective participation (voice) in decision-making and policy formulation.

Yabowork Haile, Area Program Manager of A.C.O.R.D Ethiopia, in his research paper, also showed that EPA has a negative impact on the Ethiopian agricultural sector. Fruit producers, for example, will face crippling competition from subsidised European producers. He continued to argue that the Ethiopian Horticulture sub sector will also face high competition from European products and will suffer from the stringent hygiene and safety standards imposed by the EU.

In addition, EPA is not expected to bring much of an additional market for Ethiopian cotton and Europe doesn’t encourage final processing of coffee, which brings the highest margin to EU firms.

The dumping of off-season products like garments and shoes, and of expired processed food products into the Ethiopia market may also arise. The service sector however may not be harmed as it is not mandatory to include services in an EPA the study indicated.

It added that Ethiopia manufacturers would not survive if they were to trade with EU using zero tariffs. The infant industries cannot compete with products manufactured in Europe on an equal footing if the markets are to be liberalised.

Researchers suggested alternative recommendations to Ethiopia signing the EPA. The options were not signing the EPA and continuing to benefit from other opportunities ; form alternative configurations comprising of Least Developed Countries (LDCs) ; or try to incorporate Ethiopia’s concerns and sign the EPA.