Ethiopia's Access to the WTO with Emphasis on Foreign Market Access
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Date
2006-07
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A.A.U
Abstract
The purpose of the thesis is to discuss and and analyze 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 p referential 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 [Q the WTO.
We employ bod1 descriptive and empirical analysis approaches. T rends 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 arc among descriptively analyzed issues. For
en1pirical analysis part, we employ the gravity model of international trade and include data on 31
of Ethiopia's trade panniers. The empirical analysis is done using two sample periods-(I 995-2003)
and (2000-2003 )-to observe the effects of recent preferential market accesses-AGOA and EBA
initiatives. T o 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 g ranted Ethiopia preferential market access under
EU-ASP economic partnership (Coronal! Agreement) and EBA initiatives. United state also
offered preferential market access for Ethiopia under AGOA, However, it is found that Ethiopia’s
utilization of these preferential market accesses IS not satJsf.1crorr.
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, he should demand long-enough periods both for
accession process and transition period to address her supply side problems.
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Keywords
Ethiopia's Access, Foreign Market Access