Ethiopian foreign trade statistics collection, compilation. As ethiopias new government begins work in september 2010, it is armed with a new plan. The aim of this paper was to enrich the way of measuring trade openness taking into account two different dimensions of countries integration in world trade. Columbia university, the earth institute on ethiopia new york. The principal reason for protection and thus inwardlooking strategy is the infant industry argument bardhan, 1970 that underlines the need for protecting firms. This account also elaborates the evolution of thinking about how perceptions of natural resources have evolved over time, including their role in determining. As the arguments stand, the link between trade liberalization and poverty becomes very important for the assessment of the impact of trade liberalization on poverty. Trade liberalization and the prospects of the private. Request pdf the impact of trade liberalization on the ethiopias trade balance this study examines the impact of trade liberalization on. The impact of trade liberalization on ethiopian export. Among many policies that most countries including ethiopia have decided to optfor is trade liberalization of economies herath, 2010.
One of the anticipated gains from the trade liberalization policies adopted by. World trade indicators 200910 ethiopia trade brief trade policy ethiopia began trade liberalization reforms in the early 1990s. The impact of trade liberalization on the ethiopias trade balance. Trade liberalization brought in positive results in ethiopia allaro, 2012. Studying the poverty effects of trade liberalization in ethiopia is timely and relevant as the country. Pdf the impact of trade liberalization in trade balance. Trade liberalization and the prospects of the private sector. This study examines the impact of trade liberalization on the ethiopia s trade balance using the data over the period 1974 to 2009 from nbe national bank of ethiopia. The empirical results show that there are both shortterm and longterm relationships between liberalization and economic growth.
Publications on ethiopia available in pdf format include. Balance of trade in ethiopia averaged 2350 usd million from 2006 until 2019, reaching an all time high of 956. Using a cge model, this study analyses the impact of trade liberalization on poverty at the household level taking ethiopia as a case. Objective of the study the general objective of the study is to explore the relationship between trade liberalization. The effect of exportled growth strategy on the ethiopian.
Agreement between the government of the united states of. The research is aimed to scrutiniseempirically the elg exportled growth strategy on ethiopias economy. It eliminated quantitative restrictions on imports and gradually reduced the level and dispersion of tari. One is the closed nature of the ethiopian financial sector in which there are no foreign banks, a noncompetitive market structure, and strong capital controls in. This paper focuses on issues of financial sector liberalization in ethiopia, with reference in particular to the ethiopian banking sector. Exploring the relationship between trade liberalization. International trade and its effects on economic growth in. Simultaneous trade and road infrastructure reforms make ethiopia an excellent case study for our purpose. Impact of trade liberalization on poverty in ethiopia international. Kebede4 january, 2011 1 this research is financed by the aid of a grant from poverty and economic policy pep research network, financed by the international development research center idrc.
Claudius preville is project director and senior trade economist for the european commissionfunded. A brief list of all types of business related taxes in ethiopia. The impact of trade liberalization in trade balance of ethiopia. Exploring the relationship between trade liberalization and. Trade and foreign direct investment fdi figure in the new plan but less reliance is placed on fdi inflows than in the past and as much emphasis appears to be placed on import substitution as on export expansion to reduce the trade deficit. The effect of trade liberalization on economic growth. Desiring to ensu re the necessary relationship between trade liberalization and gene ral environmental protection policies, in furtherance of sustainable development. Ethiopia, trade policy, liberalization, trade costs, facilitation jel codes.
Poverty reduction is the core objective of the ethiopian government. Ethiopia carried out trade liberalization between 1974 and 2009. This followed a wave of trade reforms aimed at reducing tariff barriers that occurred between 1996 and 2003. Economic growth nexus trade liberalization in ethiopia.
Trade liberalization, infrastructure and firm performance. In all parts of the world regional integration was seen as a route towards a fairer, more inclusive globalization. Assessing the consequences of the economic partnership agreement on the ethiopian economy hakim ben hammouda, stephen karingi, ben idrissa ouedraogo, nassim oulmane and mustapha sadnijallab1 abstract. Reductions in import prices of textiles and leather products increase imports of these goods implying that trade liberalization is likely to dampen domestic. Gradual trade liberalization and firm performance in ethiopia arne bigsteny mulu gebreeyesusz mans soderbomx 27 november 2009 abstract we use rmlevel data for the ethiopian manufacturing sector matched with commoditylevel data on tari. As a result of that trade openness has been widening up in these economies. This account also elaborates the evolution of thinking about how perceptions of natural resources have evolved over. Economic growth is the principal, but not the only means to this objective. Starting in 1997, ethiopia implemented large investments in infrastructure with the road sector development programme. We identify two factors that may constrain ethiopias financial development. F, f14, f15 dan ciuriak is a consulting economist and former deputy chief economist at foreign affairs and international trade canada. The case for financial sector liberalization in ethiopia. The output shows that export orientation, growth rate of real growth domestic product and trade liberalization have positive impact on fdi flow of ethiopia. A working party to examine the countrys application of membership to the wto was established in february 2003, and held its first.
The results presented indicate that a free trade area would reinforce the linkages between ethiopia and european countries, including. The most striking feature of trade models is their ability to project wildly different outcomes when modeling an identical policy. The pdf file you selected should load here if your web browser has a pdf reader plugin installed for example, a recent version of adobe acrobat reader if you would like more information about how to print, save, and work with pdfs, highwire press provides a helpful frequently asked questions about pdfs alternatively, you can download the pdf file directly to your computer, from where it. In the last three decades, trade liberalization increasingly evolved with the. July 1988, is a public notforprofit organization devoted to advanced policy research and training. Ethiopia trade imports include food, animals, machinery, transport equipments, fuel, cereals, vehicles and textiles. Ethiopia trade and investment priorities claudius preville. The impact of trade liberalization on the ethiopias trade. An empirical survey1 andre martens department of economics university of montreal montreal, quebec, canada january 2008 introduction does trade liberalization foster fdi in emerging countries. Productivity, and resource allocation in manufacturing firms in ethiopia dawit zenebe university of wisconsin madison. The paper finds that trade liberalization boosts economic growth and reduces poverty in the long run while it has small effects in the short run.
Exploring the relationship between trade liberalization and ethiopian economic. International trade and its effects on economic growth in china international trade, as a major factor of openness, has made an increasingly significant contribution to economic growth. Degit2017conferencepaperpreliminaryandincomplete trade liberalization, infrastructure and firm performance. Trade liberalisation, infrastructure, and firm performance. Globalization is currently a popular and controversial issue, though often remaining a loose and poorlydefined concept. Trade liberalization, productivity, and resource allocation. The impact of trade liberalization on poverty in ghana. Marxist writers went further and said that poor countries should not trade at all with the socalled northredding, 1999. This study examines the impact of trade liberalization on the ethiopias trade balance using the data over the period 1974 to 2009 from nbe national bank of ethiopia. Gradual trade liberalization and firm performance in ethiopia. International trade and its effects on economic growth in china. The country has undertaken serious trade reforms, either as a part of major macroeconomic reforms and commitments with international regulations, or by decisions driven by a process of internal adjustment for the last two decades. The effect of exportled growth strategy on the ethiopian economy hailegiorgis biramo allaro. Trade liberalization and foreign direct investment fdi in emerging countries.
The impact of trade liberalization on the ethiopia s trade balance. The social impact of globalization in the developing countries. Impacts of trade liberalization on growth and poverty in. The world trade organization came into being in 1995. The impact of trade liberalization on air pollution. Sometimes too comprehensively, the term is used to encompass increases in trade and liberalization policies as well as reductions in transportation costs and technology transfer. Trade liberalisation, infrastructure and firm performance. Economic growth nexus trade liberalization in ethiopia ijlret.
However, a similar level of trade openness can hide different types of trade structures. Given the potential benefits of trade liberalization policies, it is important to examine whether such policies are in fact in conflict with the environment as they accelerate economic growth. Assessing the consequences of the economic partnership. Comparative advantage ricardos theory of comparative advantage states that specialization and free trade will bring gains to both countries. Trade data dissemination central statistical authority there is a servicelevel agreement the central statistical authoritys data requirement has been identified accordingly, data is extracted by customs and will be prepared in proper format text file to update the eurotrace data bank. Trade liberalization, inequality and poverty in ethiopia a. Conversely, the inward looking development policies stressed the need for developing countries like nigeria to evolve their own style of development and to control their own destiny. Saudi arabia, india, italy and japan also have significant share in ethiopia imports. Thus, liberalization in short is the removal of controls in order to encourage economic development. The process of liberalizing the foreign trade regime. How ever, macro economic instability and poor infrastructure have negative impact on fdi of ethiopia. Trade facilitation in ethiopia african journals online. Gradual trade liberalization and firm performance in ethiopia 2009 working paper. The effect of exportled growth strategy on the ethiopian economy.
Trade liberalization of economies via the reduction or complete elimination of trade barriers has become the most popular economic policy of developed and developing countries today. The paper finds that trade liberalization boosts economic growth and reduces poverty in the long run while it has small. This paper with aim of studying the impact of trade liberalization on environment has made use of a time series data from 1970 to 2010. My country, ethiopia, being one of the developing countries, has opened its borders for trade since 1992. Trade liberalization and foreign direct investment fdi in.
According to the world bank 2001, trade liberalization is defined as i the removal of or reduction in the trade. Countries are better able to manage the social and economic challenges of globalization by working together. Hence, we can argue that tari reductions were largely exogeneous to domestic rms. Trade liberalization of economies via the reduction or complete elimination of trade barriers has become the most popular economic. This version of neoclassical trade theory has continued to have a special appeal to economists championing the cause of free trade on the grounds of optimization at a global level, of productive efficiency. The country has undertaken serious trade reforms, either as a part of major macroeconomic reforms and commitments with international regulations, or by decisions driven by a. The relative impact of trade liberalization on developing. Fikadu asfaw and associates law office falo on 11 apr 2011 related to trade policy and regulations in ethiopia. The pdf file you selected should load here if your web browser has a pdf reader plugin installed for example, a recent version of adobe acrobat reader if you would like more information about how to print, save, and work with pdfs, highwire press provides a helpful frequently asked questions about pdfs. In the light of this, their study examined the effect of trade liberalization on trade tax revenue in nigeria. It accounts for over 16% of the total import volumes, based on 2009 statistics. Prior to liberalization, parastatal marketing boards controlled all levels of marketing of cocoa beans and also taxed cocoa bean exports. Sukar and others published the effect of trade liberalization on economic growth. Considering that it would be in the mutual interest of the parties to establish a mechanism between them for encouraging the liber alization o f trade and inves tment.
Economic liberalization or economic liberalisation is the lessening of government regulations and restrictions in an economy in exchange for greater participation by private entities. Addis ababa, ethiopia investment opportunities in mekelle, tigray state, ethiopia. Chinese international trade has experienced rapid expansion together with its dramatic economic growth which has made the country to target the world as its market. The paper concerned with the assessment of resistance, justification and the credibility of this justification in financial sector liberalization in ethiopia. One of the youngest of the international organizations, the wto is the successor to the general agreement on tariffs and trade gatt established in the wake of the second world war. Two scenarios complete tariff cut and uniform tariff scheme.
Agricultural trade liberalization and economic development. More specifically, trade openness has had a positive and significant impact on the economic growth of ethiopia. It also attempts empirical analysis to find the determining factors of fdi in ethiopia. The impact of trade liberalization on ethiopian export, import and gdp. So while the wto is still young, the multilateral trading system that was originally set up.