This paper utilizes an error correction model to identify the determinants of internationalrntrade flows of Ethiopia through the estimation of demand elasticities for aggregate importsrnand exports and their respective components during 1974/75:1 - 1999/2000:4. In thernestimation of the long run relationships among the variables, the Johansen multivariaternco integration procedure is employed. Accordingly, the results show that the country facesrninelastic short-run price elasticities for aggregate import and its components (fuel andrnmachinery). Similarly, the real income elasticities are lower for aggregate imports butrnthough larger for fuel and machinery they are found to be weakly significant for machineryrn(significant only at 10 percent). On the other hand, foreign exchange receipts are found tornaffect imports more significantly. The lagged imports have, however, an indirect relationshiprnwith the current import demand. The inelastic price elasticities of demand for imports implyrnthat price policies such as devaluation have less impact to reduce the volume of imports.rnFurthermore, the lower real income elasticity for aggregate import together with its beingrnweakly significant for components imports implies that stabilization policies are less power/iiirnin assisting trade liberalization efforts. More generally, policies that affect the foreignrnexchange availability in the form of capital inflow and export earnings are likely to have arnlarger impact on import volumes than those that depend exclusively on exchange rate andrnaggregate demand management.rnThe results of the estimation of aggregate export and its components (coffee and hides andrnskins) also indicate that the price and income elasticity that the exports of the country'srnprimary commodities face in the international markets are relatively smaller. Furthermore,rnthe lagged exports for both coffee and hides and skins have negative relationships with therncurrent export demand. The inelastic price and income elastic ties for export demand implyrnthat there is a need for further diversification of exports that helps to shift towards the exportrnof manufactured goods. The negative relationship of lagged exports with the current exportrndemand also implies that the counl1y has to diversify the destination of its exports.