PARTICIPATION OF ETHIOPIA IN REGIONAL ECONOMIC COMMUNITY AND READINESS TOWARDS AFRICAN CONTINENTAL FREE TRADE AREA

Abstract

Regionalism has become a preferable way for nations to promote their political and economic interest and even recognized by United Nations (here in after UN) and similar arrangements followed in its functioning. African countries as any other have regional economic arrangement and now AFCFTA. However, Ethiopia engagement in regional economic community (here in after REC) is very low and the import export balance is at deficit in general and intra Africa trade in particular. With this trade balance Ethiopia ratified the AFCFTA. The thesis entirely focuses on relating poor participation of Ethiopia in the REC and possible expectations due to AFCFTA where better economies will have access to Ethiopian market while Ethiopia had several production and infrastructure issues to be competitive. The thesis tries to address pros and cons of weak participation in REC towards Ethiopia, possible gains and losses from the AFCFTA and domestic realities towards free trade area (here in after FTA) and the AFCFTA in particular are addressed. The thesis looked in to Poor participation in COMESA and possible impact towards AFCFTA with building block status. Furthermore, the approach of the two GTP and performance is looked. In doing so the research used doctrinal approach that highly relies on literature. It also used qualitative techniques by interviewing key stakeholders in the trade sector. Primary and secondary sources are used. The thesis discussed existing trade realities of Ethiopia in terms of setting policies, laws and institutions to facilitate the market for 55 trading partners. In doing so the experience of international regime and other regions along with lessons are discussed. In general, the overall readiness of the country starting from policy attentions up until related trade facilitation concerns and infrastructure issues are discussed. Based on the findings the research recommends that Ethiopia to have a clear policy towards foreign trade and AFCFTA along with that an institution that facilitates the transaction under AFCFTA is important. To protect the domestic and the revenue interest government need to identify exceptions and technical provisions under AFCFTA. And also need to identify natural production advantage of Ethiopia and focus on supporting such sectors. Furthermore, government to work in various infrastructure challenges to facilitate trade such like road, port development, electricity, banking, insurance, and telecom and related. For all this the government needs to support the domestic industries and traders in terms of finance and techniques assistance