Potential Market Structure, Competition, Liberalization and Trade in Services after Economic Partnership Agreements (EPAs): The Case of Ethiopia

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The conception of market led international trade as a means to mutual benefits for all engaged bodies is a truth rooted in the invisible hand notion of Adam Smith (1776). Carrying on this 18th century factual understanding of free trade and aiming at realizing the full benefits of international trade, regional and international agreements and negotiations are underway to reduce and eventually eliminate restrictions on free functioning of markets. Among these, Economic Partnership Agreements (EPAs) being negotiated between EU and ACP countries are comprehensive accords attempting to promote free workings of markets. Beyond the common tariff and quota-free understanding of free trade, EPAs include provisions on investment and trade in services with an ultimate aim of creating market-led service industries. As an economy negotiating EPA with EU, potential outcomes of the agreement 'On the Ethiopian service industries call for assessment. In this regard, this study examines the potential post-EPA competition, trade and investment in three fundamental but restricted service industries of the Ethiopian economy. Based on reviews of CARIFORUM (sates that have completed EPA negotiations) experiences, EPA service provisions, the service industry structures and regulatory framework of the industries in Ethiopia; findings of the study reveal that, aligned with the objective of EPAs, the telecommunications, finance and maritime transport industries of Ethiopia would move towards a competitive industry structure, trade and liberalization for investments in the post-EP A future.



Competition, Liberalization, Potential Market Structure