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Please use this identifier to cite or link to this item: http://hdl.handle.net/123456789/901

Authors: Welde, Bulto
Advisors: Dr. Girma Estiphanos (Advisor)
Copyright: 2006
Date Added: 22-Apr-2008
Publisher: Addis Ababa University
Abstract: The purpose of the thesis is to discuss and analyze the effects of WTO accession on Ethiopia’s economic policy making with particular emphasis on foreign market access for her exports. That is, its aim is to ask how important market access might be as an incentive for Ethiopia to join the WTO. Assessing Ethiopia’s effective utilization of already granted preferential market access is also another major objective addressed in the paper. The paper also discusses the costs and benefits to be expected by Ethiopia if she accedes to the WTO. We employ both descriptive and empirical analysis approaches. Trends of Ethiopia’s exports by major destinations, Ethiopia’s utilization of preferential market access, and major consequences of policy changes as a result of joining the WTO are among descriptively analyzed issues. For empirical analysis part, we employ the gravity model of international trade and include data on 31 of Ethiopia’s trade partners. The empirical analysis is done using two sample periods-(1995-2003) and (2000-2003)-to observe the effects of recent preferential market accesses-AGOA and EBA initiatives. To enable us to draw sound conclusions from empirical results, three trade policy indicators are used. These are Heritage Foundation Index of distortions in international trade, Economic Freedom of the World international trade index and trade dependency ratio of Ethiopia’s trading partners. European Union (EU) member countries, COMESA member countries, Saudi Arabia, United States (US) and Japan are major importers of Ethiopian exporters. In addition to the Generalized System of Preferences (GSP), European Union granted Ethiopia preferential market access under EU-ASP economic partnership (Cotonou Agreement) and EBA initiatives. United States also offered preferential market access for Ethiopia under AGOA. However, it is found that Ethiopia’s utilization of these preferential market accesses is not satisfactory. Without taking these preferential market accesses into account, our empirical estimates show that import barriers imposed by Ethiopia’s trade partners do not play an important role in determining the volume of Ethiopian exports. Therefore, the results suggest that the most favored nation mechanism and putative improved market access might not be an important criterion for deciding Ethiopia’s Accession to the WTO. Hence she should demand longenough periods both for accession process and transition period to address her supply side problems.
Description: A thesis submitted to the school of Graduate Studies of Addis Ababa University in partial fulfillment of the requirements for the Degree of Master of Science in Economics
URI: http://hdl.handle.net/123456789/901
Appears in:Thesis - Economics

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