LDC service waiver is a specific preferential treatment of LDCs in service trade. The mainrnobjective of this preferential treatment scheme is to boost the participation of LDCs inrninternational trade in service. To this effect, the waiver decision waived the MFN obligationsrnof GATS to the extent necessary to permit WTO members to provide preferential treatment tornservices and services suppliers of LDCs without according the same treatment to like servicesrnand service suppliers of all other members. All LDCs whether member to WTO or not, such asrnEthiopia, are similarly made beneficiaries.rnTaking in account, the indispensable importance of international trade in service for povertyrneradication and over all development of Ethiopia on one hand; and the limited capacity of therncountry to compete in international trade in service because of many internal and externalrnfactors on the other hand, the service waiver preferential treatments scheme incorporatedrnmany potential opportunities for Ethiopia. However, there are some internal and externalrnpotential challenges that the country should seriously concern with for the effectivernexploitation the preferential treatment.rnThus, Ethiopia should devise appropriate strategy to solve these problems or at leastrnminimize their impacts and to fully exploit the prospects under the service waiver preferentialrntreatment.rnKey words; - LDC service waiver, LDCs, preferential treatments