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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z 0-9

Assessing the Consequences of the Economic Partnership Agreement on the Ethiopian Economy

Author: Hakim Ben Hamouda, Stephen Karingi, Ben Idrissa Ouedraogo, Nassim Oulmane, Mustapha Sadni-Jallab
Organisation: Economic Commission for Africa (ECA)
Publish Date: October 2006
Country: Ethiopia
Sector: Economic
Theme: Finance
Type: Other publication
Language: English
Tags: Regional Integration, Economic Integration

The results presented indicate that a free trade area would reinforce the linkages between Ethiopia and European countries, including traditional partners such as Italy, with implications for the regional integration arrangements that Ethiopia is currently involved in. There will be significant trade diversion away from other African countries currently trading with Ethiopia. The diversion will occur in the low technology sectors, which are potentially good foundations for deepened regional integration based on trade in industrial goods. The results further indicate some important implications with respect to Ethiopia’s industrialization strategy. The liberalization of industrial sectors result in more trade effects, particularly negative trade diversion, compared to the results from agricultural liberalization. The loss in revenue, which is a strong feature in general liberalization, is at the sectoral level, more pronounced in the industrial liberalization. The economic structure of Ethiopia, which supports self-reliance in food from the agriculture sector, underpins the limited losses in agriculture as compared to the industrial sector. Clearly, instead of opening the doors to economic diversification, the EPA could lead Ethiopia to deepen its comparative advantages in agricultural products.
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