VZCZCXYZ1415
RR RUEHWEB

DE RUEHDS #0615/01 0641414
ZNR UUUUU ZZH
R 041414Z MAR 08
FM AMEMBASSY ADDIS ABABA
TO RUEHC/SECSTATE WASHDC 9822
INFO RUCNIAD/IGAD COLLECTIVE

UNCLAS ADDIS ABABA 000615 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR AF/EPS (DAVIDSON AND POTASH), EB/TPP LURIE AND DRL/AE 
GILBRIDE 
 
E.O. 12958: N/A 
TAGS: ETRD AGOA ECON ET
SUBJECT: ETHIOPIA INPUT FOR 2008 PRESIDENT'S ANNUAL AGOA REPORT 
 
Ref: State 20082 
 
¶1. Post submits the following input for the 2008 President's Annual 
AGOA report: 
 
¶2. Status:  AGOA-eligible, including for textile and apparel 
benefits. 
 
¶3. AGOA Trade and Investment:  Ethiopia's 2006 exports under AGOA 
and its GSP provisions were valued at $7.2 million, representing 9 
percent of total Ethiopian exports to the United States.  AGOA/GSP 
exports included apparel and a variety of agricultural products. 
 
¶4. Market Economy/Economic Reform/Elimination of Trade Barriers: 
Since the early 1990's, Ethiopia has pursued development of a mixed 
economy, encouraging greater private sector activity.  However, the 
state remains heavily involved in most economic sectors, and 
parastatal and party-affiliated companies continue to dominate trade 
and industry.  Several areas, including banking, insurance, 
telecommunications, broadcasting, shipping and forwarding, and 
large-volume passenger air transport, remain closed to foreign 
investors.  Ethiopia formally applied for WTO membership in January 
2003 and submitted its Memorandum of 5. Foreign Trade Regime to WTO 
- one of the first formal steps in the accession process - in 
December 2006.  In 2005, Ethiopia and the U.S. signed an Open Skies 
air transportation agreement.  In recent years, Ethiopia has 
simplified its tariff system and reduced tariff rates.  Business 
disputes involving a foreign investor or the state may be submitted 
to an Ethiopian court or to international arbitration within the 
framework of any bilateral or multilateral agreement to which the 
government and the investor's state of origin are contracting 
parties.  Ethiopia is not a member of the International Center for 
the Settlement of Investment Disputes. 
 
¶6. Political Pluralism/Rule of Law/Anti-Corruption:  Ethiopia 
continues to progress towards a more democratic political system. 
The elections in May, 2005 were the most openly contested in 
Ethiopia's history and gave birth to the country's first truly 
multiparty Parliament. Despite some irregularities, the results of 
the election were generally credible.  Within parliament, 
concessions were made in committee leadership profiles and 
provisions for questioning executive branch officials in an effort 
to accommodate the substantial opposition presence.  The opposition 
parties in parliament have responded by being vocal representatives 
of alternative viewpoints.  Outside of parliament, parties' 
unwillingness to compromise over regulations and composition of 
democratic institutions caused an initially promising process of 
inter-party dialogue break down in mid-2007.  Harassment of 
opposition leaders and supporters at a local level in rural areas 
continued to persist throughout 2007 hampering opposition parties' 
ability to prepare for April 2008 local elections.  While the first 
half of 2007 was marked by the trial of prominent journalists and 
opposition leaders, the Ethiopian government's pardon of most of 
these individuals in July 2007 represented a magnanimous gesture and 
an opening for further positive political engagement in the second 
half of the year.  While the law provides for an independent 
judiciary, the judiciary remained weak and overburdened.  Some NGOs 
perceived the judiciary to be subject to significant political 
intervention.  Corruption continues to be a problem. 
 
¶7. Poverty Reduction:  Ethiopia's GDP per capita is about $130, 
making it one of the poorest countries in the world.  Poverty 
alleviation and food security remain priorities for the government. 
The 2007/08 government budget allocations reflect poverty reduction 
priorities.  The government has decreased military spending from 13 
percent of GDP in 1999/2000, during the border war with Eritrea, to 
8.46 percent of GDP in 2007/08, and is redirecting the savings to 
poverty reduction and capacity building efforts.  In coordination 
with donors, the Ethiopian government is implementing its 2006-2010 
Plan for Accelerated and Sustainable Development to End Poverty in 
Ethiopia (PASDEP).  In addition to continuing poverty reduction 
strategies in areas such as human development, rural development, 
capacity building, and food security, the new PASDEP will increase 
efforts in commercialization of agriculture, promote greater private 
sector participation in the economy, and scale-up efforts to achieve 
the Millennium Development Goals. 
 
¶8. Labor/Child Labor/Human Rights:  Although the law prohibits 
anti-union discrimination, unions reported that employers frequently 
fired union activists.  The law provides for strikes but there are 
restrictions and exclusions.  A new labor law that went into effect 
in February 2004 and was amended in June 2006 is generally 
considered pro-employer by labor unions.  Ethiopia has ratified all 
eight core ILO Conventions.  The law prohibits forced or compulsory 
labor, but there were reports of these practices, including the 
trafficking of women for involuntary domestic labor and sexual 
exploitation.  There were laws against child labor; however, the 
government did not effectively implement these laws in practice, and 
child labor remained a serious problem, both in urban and rural 
areas.  The Ministry of Labor and Social Affairs is responsible for 
enforcing child labor laws, but it did not provide adequate 
resources and oversight.   There are reports of forced or bonded 
labor of children who have been trafficked to work as domestic 
servants.  The government is implementing a National Plan of Action 
for Children, participating in two USDOL-funded child labor and 
education projects, working to combat human trafficking, and 
partnering with UNICEF on child protection and education activities. 
 Human rights problems include restrictions on freedom of the press; 
arrest, detention, and harassment of journalists for publishing 
articles critical of the government; restrictions on freedom of 
assembly; and limitations on freedom of association.  While civilian 
authorities generally maintained effective control of the security 
forces, there were instances in which elements within those forces 
acted independently of government authority and in which they 
reportedly engaged in unlawful killings; arbitrary arrest and 
detention, especially of suspected opposition members or 
sympathizers; and mistreatment of detainees and opposition 
supporters.  Poor prison conditions are also a problem. 
 
YAMAMOTO