Ethiopia Omits Advantageous Goods, Services From AfCTA Implementation Regulation

The Council of Ministers has ratified a regulation outlining the concession of duty tariff rates on goods for trade under the African Continental Free Trade Agreement (AfCFTA).

The 419-page regulation approved last month appeared in the Negarit Gazette this week, almost six years after Ethiopia ratified the AfCFTA agreement and four years since the AU operationalized the trade deal in January 2021.

The trade deal applies to close to 6,000 goods and services identified, of which 90 percent (category A) are subject to a zero tariff rate immediately upon operationalization. Seven percent (category B) will see tariffs drop to zero within a 10-year period, while the remaining three percent (category C) are exempt from tariff reductions.

Countries keep their most competitive goods and services under the three percent to maintain a market advantage.

The regulation lists only the goods and services classified under category A, omitting those under categories B and C.

Coffee is not included in category A but roasted chicory and other roasted coffee substitutes and extracts or concentrates are included on the list.

Banking services are not included under category A. Neither are telecom services, sesame, or khat.

On the other hand, agricultural products, alcohol, cotton, post-tanning leather, fertilizer, cement, and a slew of other commodities make the list.

The Ministry of Finance is authorized to differentiate goods classified under categories B and C, according to the regulation. The Ministry also has the power to suspend the benefits of tariff concessions in the event of a request from the Ministry of Trade and Regional Integration for member states that fail to comply with the terms of the trade agreement, according to the regulation.

The Customs Commission is expected to work with other government agencies to establish procedural systems to implement the regulation. The Commission is also charged with issuing certificates of origin for goods traded under AfCFTA, and verifying the authenticity of certificates of origin for goods imported under the trade deal.