It is trite to mention that the benefits and costs from trade expansion may never be evenly distributed across ACs. However, the estimated revenue loss should not be considered as an absolute loss for ACs as the long-term benefits, facilitated by adjustment support remain significant. It will allow comparative advantage to thrive, thereby granting customers and firms access to cheaper products/raw materials in the continent.
Economies of Scale
Joining the WTO will reduce the diverse economy that the Ethiopian government has been fostering. But if the government feels that WTO membership is necessary, then Ethiopia must take it’s time to negotiate more favorable terms in line with its development status and objectives. In particular, Ethiopia should not make the same mistakes as other newly joined nations and should not agree to undertake higher levels of commitments than is made absolutely necessary by the WTO rules and what other founding LDCs, such as Bangladesh, have made. Specifically, Ethiopia should seek to ensure that tariffs are bound at the highest rates possible.
The AfCFTA will over a period of 15 years after entry into force progressively eliminate tariffs on intra-African trade, making it easier for African businesses to trade within the continent and cater to and benefit from the growing African market. Consolidating this continent into one trade area provides great opportunities for trading enterprises, businesses and consumers across Africa and the chance to support sustainable development in the world’s least developed region.