Sequencing Regional Integration and WTO Accession in Ethiopian International Trade Policyy
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Date
2007-03
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A.A.U
Abstract
It is generally argued that trade encourages resource allocation based on comparative
advantage, acts as an engine of economic growth and provides welfare gains. Though.
economic competency and market access have determining roles, these benefits are
expected to be earned if the nation is engaged in a multilateral trading arrangement. To
these respect, developments in global trade arrangemel1ls and regional integral ion
initiatives are dramatically changing the trading environment of the world in general and
developing countries' trade policy in particular. Recent trends indicated that "domino
effect ,, 0 has become a persistent phenomenon. however. each and every nation should be
careful into which pool it falls. in this respect Ethiopia is faced with different choices of'
which the prominent integrations are the World Trade Organization (WTO) and Common
Market. for East and Southern Africa (COMESA). Even through both these have their
pros and cons, it is economically viable to establish and maintain lucrative trade tie with
at least one. Up until now, without full involvement in any of the two the Ethiopian
economy has witnessed an ever- increasing trade deficit with both arrangements. This
phenomenon can be mitigated through fair trade agreements and o/course by internally
transforming the economy and its ,facilitating agents. /n addressing trade negotiations, it
is advisable for the country to get involved with one efficient-integration than being
inactive member in several. Accordingly, this paper has reviewed problems and
prospects joining both economic arrangements and made empirical analysis using
Johansen estimation Procedure for estimating elasticity of trading with the groups.
Consequently, it has reached to a finding that it is beneficial for Ethiopia 10 .first
integrate its economy with regional integration. i.e. COMESA and then accede with WTO
than integrating the other way round
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Keywords
International Trade Policy, Sequencing Regional Integration