Discussion Papers

Henok Assefa/Derk Bienen/Dan Ciuriak, December 2012

Ethiopia is in the midst of a sustained growth surge that is becoming increasingly broad-based, building on major improvements in educational attainment, improved health outcomes, and infrastructure capacity in terms of access to power, transportation and telecommunications. The Government’s Growth and Transformation Plan sets ambitious targets for further improvements in these areas, together with significant reforms aiming to improve trade logistics, including through the roll-out of the authorized economic operator program across the growing number of export-oriented industry parks and a major improvement in the main export corridor to Djibouti. This industrialization push is taking place at a time when global trends are coming together to provide Ethiopia an opportunity to integrate its economy into the modern “Made in the World” system of production, including by attracting some of the labor-intensive production that is currently migrating out of China and other East Asian economies as wage rates rise in those regions.

Derk Bienen/Dan Ciuriak/Timothée Picarello, March 2012

The European Union is one of the most active users of antidumping and antisubsidy measures (trade defense instruments or TDIs) worldwide. Traditionally, TDIs have been characterized as the international trade analogue of internal market competition policies, addressing predatory and other price-distorting and anti-competitive business practices of firms and market-distorting measures of foreign governments (whether for “strategic policy” or mercantilist objectives). The economic literature, however, is quite overwhelmingly negative towards the way TDIs have been used and indeed calls into question whether there is any defensible policy rationale for their existence. This judgment is based on analyses of why, how and with what effect TDIs have been used.

Since TDIs do not involve a motive test, motive must be inferred from patterns of use. As a result, numerous theories have emerged as to the de facto role of TDIs – as “surge” protectors, buffers for macroeconomic shocks, retaliatory threats to safeguard market access abroad, domestic political economy grease for trade liberalization and so forth. This lack of clarity leads to many real problems.  For trading firms, it creates uncertainties about the rules of the road for market access, which can have a chilling effect on trade.  For governments, it results in an ad hoc quality to policy decisions. For public discourse, it contributes to the often confused, acrimonious and emotive nature of the debate about “unfair” trade.

Derk Bienen, September 2010

Ethiopia is currently involved in a number of international trade negotiations which will have a far-reaching impact on the Ethiopian economy. Negotiations take place both at the multilateral level (Ethiopia’s accession to the World Trade Organisation) and inter-regionally (Economic Partnership Agreement with the European Union). Regionally, studies are under way on the establishment of economic integration among members of the Inter-Governmental Authority for Development and the Sana’a Forum for Co-operation. Finally, a decision will have to be taken regarding Ethiopia’s potential joining the Common Market of Eastern and Southern Africa’s (COMESA) Free Trade Area – which might be superseded by a Tripartite FTA combining the 26 members of COMESA, the Southern African Development Community (SADC) and the East African Community (EAC).

Dan Ciuriak, August 2010

This study seeks to identify and estimate the relative importance of supply- versus demand-side constraints on Ethiopia’s exports. Ethiopia has tried radically different trade strategies in the past, including a strategy of import replacement/protection for infant industries during the Imperial period, a heavily state-managed trading system during the military government era, and a market-oriented liberalized approach supported by the international financial institutions in the most recent period. It is presently engaged in various trade initiatives, including accession to the World Trade Organization, negotiations with the European Union on an Economic Partnership Agreement and with African regional partners towards a Tripartite Free Trade Area (TFTA).