EU Statement at the 3rd Trade Policy Review of the Republic of Djibouti, 12 October 2022

EU Statement at the 3rd Trade Policy Review of the Republic of Djibouti, 12 October 2022

I would first like to welcome the Delegation of Djibouti led by H.E. Mohamed Warsama Dirieh, Minister of Trade and Tourism. I would also like to thank the WTO Secretariat and the government of Djibouti for their reports, which form the basis for our discussion today. Let me also extend our appreciation to the Discussant, H.E. Dr Adamu Mohammed Abdulhamid (Nigeria) for introducing us to the main features of Djibouti's trade policy.

The EU welcomes this opportunity to discuss the developments in Djibouti's trade policies and practices. Since the previous Trade Policy Review in 2014, Djibouti launched a long-term reference framework, Vision Djibouti 2035, which aims to promote economic diversification through reforms such as improving the business climate, including by reducing factor costs, and carrying out major infrastructure projects. We look forward to hearing about the first results of this important framework.

The implementation of the first economic development plan, the Strategy for Accelerated Growth and Employment Creation (SCAPE), including investments in infrastructure, has enabled Djibouti's economy to register strong growth, with GDP increasing at rates ranging from 5.1% to 8.5%, between 2014 and 2019. In 2020, economic growth was 1.2%, due to the socio-economic effects of the COVID-19 pandemic and the political and security situation nearby. A second plan, the Inclusion, Connectivity, Institutions (ICI), adopted in February 2022 for a five-year period, aims to make Djibouti a trade and logistics hub, and develop a modern regional financial centre.

The strong economic performance since the last review has led to an improvement in Djibouti's economy. Notably, it has been classified by the World Bank as a lower-middle-income country and the Human Development Index (HDI) has gradually increased.

A healthy rules-based multilateral trading system is fundamental for Djibouti, given its limited goods production and reliance on imports. Djibouti's economic growth can certainly contribute to new trade and investment opportunities. We encourage Djibouti to further improve its business environment, for example, by increasing transparency and training.

Djibouti is an original Member of the WTO and continues to play an active role, both in multilateral and plurilateral work, including as the current Chair of the Committee on Trade and Development in Special Session, and in the Joint Statement Initiative on Investment Facilitation for Development. The EU would nonetheless encourage Djibouti to also engage in the WTO environmental and e-commerce initiatives.

The EU notes Djibouti's current role as the LDC group coordinator, which puts the country at the centre of WTO reform discussions.The EU urges Djibouti to proceed with the implementation of the WTO Trade Facilitation Agreement, including its category B and C commitments.

Trade is an important component of EU - Djibouti bilateral relations. The EU is one of the main sources of Djibouti's imports. Djibouti's trade with the EU is covered by the "Everything but Arms" initiative, which makes its exports to the EU duty-free-quota-free.

We note with satisfaction that Djibouti is a strong advocate for regional cooperation, as an active member of the Intergovernmental Authority on Development (IGAD) and the Common Market for Eastern and Southern Africa (COMESA). Djibouti is a signatory to the African Continental Free Trade Area (AfCFTA), whose objectives are to create a single market for goods and services, facilitated by the movement of persons, in order to deepen the economic integration of the African continent and lay the foundation for the establishment of a Continental Customs Union at a later stage. The EU is ready to work closely with Djibouti to ensure a smooth implementation of the AfCFTA.

TheEU-Djibouti partnership is vast and goes beyond trade, including EU development cooperation. Around 355 million euros' worth of programmes and projects are ongoing or planned under the new Global Europe 2021-2027 framework. These support Djibouti's efforts on access to drinking water and sanitation; food security and resilience; financial and digital governance; promotion of human rights; civil society; gender equality and decentralisation; and support for youth employability. For example, as part of the project on "Production of Drinking Water by Desalination and Renewable Energy" [Production Eau Potable par dessalement et Énergie Renouvelable (PEPER)], the financing agreement provides for a support component for sectoral reforms in water and electricity.

In its advance written questions, the EU has raised some issues, notably on Intellectual Property, foreign investment, manufacturing, regional integration, and notification implementation. We are also interested in learning more about the special economic zones and integration processes with Africa and the actions taken to increase competitiveness. Finally, we are interested in the strategic plan for more sustained and inclusive economic development based on the digitalisation of procedures, for which the timely adoption of a digital code would be essential.

The EU acknowledges with satisfaction Djibouti's progress since the previous review in 2014, despite the challenges faced by the country, and reiterates its willingness to support the Djibouti government in its efforts to ensure economic recovery. We look forward to a constructive exchange of views and wishthe Djibouti delegation a successful third review. Thank you.