BizCLIR

Ethiopia’s trade regime contains the key provisions that support economic development, although much of the supporting legal and institutional architecture to promote trade remains underdeveloped. The structural adjustment program of the 1990s resulted in a streamlined tariff structure with six bands, a maximum tariff of 35%, and a trade-weight average tariff level of 17.5%. Despite the reforms to the trade regime in the 1990s and early 2000s, however, additional reforms are needed before the regime is up to international standards of “good governance”; additional reforms are needed particularly in the areas of transparency, due process, trade facilitation, and pro-poor strategy. Moreover, interviewees noted that trade-supporting institutions, such as Chambers of Commerce, the courts, and trade-related Government bodies, remain hampered by a lack of political latitude to reform their own institutions and their inability to retain quality personnel.

The Government of Ethiopia’s decisions to apply for membership in the WTO and to sign a bilateral partnership agreement with the EU both present excellent opportunities to further modify the trade regime to ensure that Ethiopia’s trade policies make a maximum contribution to the country’s development and to promote domestic and foreign investment. Until Ethiopia submits to the WTO its memorandum on its foreign trade regime, however, the WTO accession process will not begin in earnest, to the detriment of the economy as a whole. Substantial work to revise legislation in the customs, intellectual property, and investment laws will mark significant improvements to the trade regime and be supportive of increased international trade.