Sequencing Regional Integration and WTO Accession in Ethiopian International Trade Policyy

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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



International Trade Policy, Sequencing Regional Integration