Ethio- Eritrea trade deal that was under preparation for many months has been finalized and it is awaiting both countries’ finial decision or approval, Ministry of Trade and Industry (MoTI) said.
Approached by The Ethiopian Herald MoTI Communication Affairs Director Wondimu Filate said that the ministry has sent a complete Ethio-Eritrea border trade legal framework to the Ministry of Foreign Affairs (MoFA) in a bid to strike a trade deal soon having secured approval from both countries.
The legal document stipulates trade agreement that relies on export items and transaction currency, he said. “When MoFA gives us green light, we will make the trade deal with our Eritrean counterpart. We have already expressed our interest and are waiting for their response.”
MoTI had conducted a study regarding the market interest or gap in Eritrea, the commodities and other products during the informal or elementary trading on the border while preparing the legal document by marketing experts, Wondimu mentioned.
The study focused on unilateral, bilateral and multilateral trading schemes in the market product interest between the two nations, he said. The cross border trade between Ethiopia and Eritrea will occur within a radius of 10 km from their shared borders.
It is a great opportunity to Ethiopians living in the border areas to trade with Eritreans as they have been carrying out various trades coming to the middle of the country wasting time and energy, he noted.
Therefore, MoTI has identified the preferable commodities and transaction currency of traders in the area. The currency will be in when the two nations reach trade agreement; they will choose Birr, Nakfa or USD as a transaction currency, according to Wondimu.
More or less the new Ethio- Eritrea trade agreement has similarity with the existing transaction of other neighboring countries, he stated. As to him, Ethiopians and Eritreans have been trading informally in the border areas and the formalizing of such trade will build a booming business between the two sisterly countries.
Scholars have been suggested that trade relation between the two countries should base on set principles. The two countries have made public that series of discussions are going on to come up with a mutually beneficial trade deal. AAU school of law Asst. Prof. Martha Belete once told The Ethiopian Herald that the deal ought to include area coverage, value cap, type of product and number of travels under the category of governing cross border trade of the pact. She also prefers the agreement shall have similarity to other border trade relations with neighboring nations.
The legal frame work that is sent to MoFA has incorporated the aforementioned suggestions, it was learnt.
The Ethiopian Herald