Using it Structuralist CGE modeling approach, this ptlper cXLIIl1incs the short-run i mp~lc[s ofrn'((1'0 accession on the Ethiopian economy. The analysis is made based on Ethiopian SocialrnAccounting Matrix (SAM) of 2001/2002 constructed by IFPIU. The simulation cxpcrimentsrnsuggest that impact of trade liberalization, import tariff reduction, has it mixed effecl on thernEthiopian economy.rnImport ta ri ff reduction is likely to increase domestic production il lld expons of cOlllmoditiesrnparticularly produced in agri culture and service sector. Connected to import tariff IccluctjOIl,rnliberaLization also have a positive effect on domestic investment and growth due to increasernthe demand for inVCStlllcnt in agri cultLII:e and ser vice sector which arises frolll a decrease inrnprices of intermediate commodity and subscclucnt incrca sc in demands o f domesticallyrnproduced cOlnmodity by the resl of the world.rnOn the othcr hand, tariff reduction has nega tive errects on govcrnmcnt fi scal revcnucs,rnpublic investment and on terms o f trade balance. ?--. fo reovcr, liberalization is likely ro red ucerndomestic productio n of manufactured goods due to it switch of consump tion in a Elvor ofrncheep imports whjch intern can lead to the domestic unpoft competing flrlns to [ace arndownward pressure on sales and profit s.rnAn imp orta n t poLicy impl.ication o f this an al ys is is that the su ccess of uacle liberalizationrncriticaLly depends on the extent 1:0 which trade policies; uacle facilitation and institution arernsyn chronized for moderni zing Ihe public sector, improvi ng tax colJection and playing th ernregulatoq' [ole in order to atUact local and foreign investment by incentive measures in favorrnof exporting companies. jV[oreover, a convincing programmes and policy action has to bernsuppotled by tech nical ass istance to sl rengthen Ethiopia's ability to increase its participationrnin world tlÂ·ade by en h an c ing its compcLitivencss' and conscCJuendy [0 derive larger benefitsrnfrom tracle