The Impact Of Ethiopias Comesa Membership On Its Exports An Augmented Gravity Modeling Approach

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This paper attempts to assess the impact of Ethiopia's COMESA membership on itsrnexport flows. In this regard the tobit random effects of the gravity model has beenrnspecified to annual export." of Ethiopia to twenty countries over the period f 98 f-rn2006. Accordingly, the results of the estimation show that COMESA membership hasrnneither a significant effect of both export trade-creation and export trade-diversion onrnEthiopia's export flows. This can be interpreted as weak participation of the countryrnwithin COMESA region. The empirical result also witnesses that Ethiopia tends to havernhighly sectoral and geographically concentrated destination of exports (a large share ofrnits exports is destined to Europe and Asia) and consists of few primary exportrncommodities. On the other hand; most of the traditional explanatory variables of therngravity model are the significant determinants on the flow of Ethiopia's exports.rnHence, the possible advices to the government to accelerate the growth of its exportsrnto COMESA member countries are to adversity the economy, enhance the exportrncompetitiveness, and encourage the involvement of the private sector in thernformulation and implementation of trade policy. Further study is also advised torninvestigate the potel1tial pros and cons of being a full member of COMESA FTA onrnEthiopia's export flows since Ethiopia is not a member of Free Trade Area (FTA), hasrnonly done a 10 percent reduction of tariff for the goods coming from COMESArnmember states

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The Impact Of Ethiopias Comesa Membership On Its Exports An Augmented Gravity Modeling Approach

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