Ethiopias Access To The Wto With Emphasis On Foreign Market Access

The purpose of the thesis is to discuss and and analyze effects of WTO accession on Ethiopia’srneconomic policy making with particular emphasis on foreign market access for her exports 'That 'isrnits aim is to ask how important market access might be as an incentive for Ethiopia to join the rnWTO. Assessing Ethiopia's effective utilization of already granted p referential market access iSrnalso another major objective addressed in the paper. The paper also discusses the costs and benefitsrnto be expected by Ethiopia if she accedes [Q the WTO.rnWe employ bod1 descriptive and empirical analysis approaches. T rends of Ethiopia's exports by rnmajor destinations, Ethiopia's utilization of preferential market access, and major consequences of rnpolicy changes as a result of joining the WTO arc among descriptively analyzed issues. Forrnen1pirical analysis part, we employ the gravity model of international trade and include data on 31rnof Ethiopia's trade panniers. The empirical analysis is done using two sample periods-(I 995-2003)rnand (2000-2003 )-to observe the effects of recent preferential market accesses-AGOA and EBArninitiatives. T o enable us to draw sound conclusions from empirical results, three trade policy rnindicators are used. These are Heritage Foundation Index of distortions in international tradernEconomic Freedom of the World international trade index and trade dependency ratio ofrnEthiopia's trading partners.rnEuropean Union (EU) member countries, COMESA member countries, Saudi Arabia, unitedrnStates (US) and Japan are major importers of Ethiopian exporters. in addition to the GeneralizedrnSystem of Preferences (GSP), European Union g ranted Ethiopia preferential market access underrnEU-ASP economic partnership (Coronal! Agreement) and EBA initiatives. United state also rnoffered preferential market access for Ethiopia under AGOA, However, it is found that Ethiopia’srnutilization of these preferential market accesses IS not satJsf.1crorr.rnWithout taking these preferential market accesses into account, our empirical estimates show thatrnimport barriers imposed by Ethiopia's trade partners do not play an important role in determiningrnthe volume of Ethiopian exports, Therefore, the results suggest that the most favored nationrnmechanism and putative improved market access might not be an important criterion for decidingrnEthiopia's Accession to the WTO. Hence, he should demand long-enough periods both forrnaccession process and transition period to address her supply side problems.

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