72584 v1 World Trade Indicators 2009/10 Ethiopia Trade Brief Trade Policy prices of fuel imports, the Ethiopian birr depreciated by 7 percent against the U.S. dollar in 2008. Ethiopia began trade liberalization reforms in the early 1990s. A Working Party to examine the country’s Ethiopia is a member of the seven-country application of membership to the WTO was Intergovernmental Authority on Development established in February 2003, and held its first meeting (IGAD), which is currently planning to create a free in May 2008. The country’s MFN Tariff Trade trade area. As a further boost to its market access, the Restrictiveness Index (TTRI)1 is currently 13.0 country, together with the other members of the percent, slightly above that of an average Sub-Saharan Common Market for Eastern and Southern Africa Africa (SSA) (11.3 percent) or low-income (11.6 (COMESA), is in negotiations with the EU to sign a percent) country. Based on the MFN TTRI, Ethiopia full Economic Partnership Agreement (EPA). In the ranks 109th out of 125 countries (where 1st is least meantime, the country continues to have duty-free and restrictive). Agricultural exports into the country face quota-free access to the EU market under the higher barriers (15.7 percent) compared to non- “Everything But Arms� (EBA) initiative. COMESA agricultural exports (12.5 percent). The country’s also established a customs union in June 2009 with average MFN applied tariff is 17.3 percent, a slight plans of fully implementing it by 2012. In April 2009, increase over the value of 16.8 percent in 2007. The Ethiopia and neighboring Sudan, signed agreements, maximum MFN applied tariff (excluding alcohol and including one on trade, to enhance bilateral tobacco) is 35 percent. cooperation. To mitigate the impact of rising global food prices in 2008, the government banned the export of major Behind the Border Constraints cereals. Ethiopia ranked 107th in the Ease of Doing Business index in 2009, which compares the business External Environment environment of 183 countries. The country’s score on the Logistics Performance Index (LPI), which Based on its Market Access TTRI2 including measures the extent of trade facilitation in the country, preferences of 1.8 percent, Ethiopia enjoys more is 2.33, on a scale of 1 to 5, compared to the averages favorable access to international markets than its SSA of 2.35 for SSA countries and 2.29 for low-income (3.9 percent) and low-income (5.6 percent) countries. It ranks 104th (out of 150) in the world and comparators. The weighted average overall rest of the 18th (out of 39) in the SSA region. Among the LPI world tariff (including preferences) faced by the subcategories, the country is strongest in ensuring the country’s exports is also 2.5 percent, with agricultural “timeliness of shipments in reaching their destination� exports, chiefly coffee, facing higher barriers (2.9 and weakest in the “ability to track and trace percent) than non-agricultural exports (0.2 percent). shipments� categories. With pressure on foreign reserves as a result of soaring Trade Outcomes Unless otherwise indicated, all data are as of August 2009 Ethiopia maintained its 20073 5.9 percent real trade (in and are drawn from the World Trade Indicators 2009/10 constant 2000 U.S. dollars) growth rate of goods and Database. The database, Country Trade Briefs and services in 2008, though this is expected to fall to 3.7 Trade-at-a-Glance Tables, are available at percent in 2009. Exports of goods and services growth http://www.worldbank.org/wti. slowed down significantly from 10.2 percent in 2007 If using information from this brief, please provide the to 3.1 percent in 2008, while import growth almost following source citation: World Bank. 2010. “Ethiopia doubled from 3.8 percent to 7.3 percent. Import Trade Brief.� World Trade Indicators 2009/10: Country Trade growth is, however, expected to slow down to 3.9 Briefs. Washington, DC: World Bank. Available at percent in 2009 and export growth is expected to http://www.worldbank.org/wti. improve slightly to 3.5 percent in 2009. World Trade Indicators 2009/10 Ethiopia Trade Brief In nominal dollar terms, trade growth of goods and COMESA. 2009. “COMESA Launches its Customs services accelerated to 28.3 percent in 2008 from 14.4 Union.� COMESA. July 24, 2009. . percent in 2007, while imports, driven by soaring oil Europa. 2009. “Africa, Caribbean, Pacific—Regional prices, grew at 29.1 percent compared to 30.9 percent Negotiations of Economic Partnership Agreements.� in 2007. Both exports and imports are, however, Europa. June 2009. . 19.4 percent in 2008, boosted by higher sales for Food and Agriculture Organization of the United coffee and non-traditional exports including oilseed, Nations (FAO). 2008. “Policy Measures Taken by pulses, flowers, and gold, although this represented a Governments to Reduce the Impact of Soaring deceleration from the growth rate of 25.4 percent in Prices—Africa—Ethiopia.� FAO. December 15, 2008. 2007. Services exports were more resilient, growing at 33.4 percent in 2008, more than double the 2007 Integrated Framework. 2004. “Ethiopia—Trade and growth rate of 16.5 percent. For fiscal year 2008/2009, Transformation.� Integrated Framework. July 2004. which ended in July 2009, exports fell by an estimated . inflows to the country were 0.4 percent of GDP in International Monetary Fund (IMF). 2009a. International 2008, dropping from 1.14 percent of GDP in 2007. Financial Statistics (Country Tables). IMF. July 2009. With plans to build several hydroelectric dams, . electricity may soon replace coffee as Ethiopia’s main _____. 2009(b). Country Report No. 9/296. IMF. export. Two new dams are due to start production September 2009b. . start exporting electricity to Sudan, Kenya, and National Bank of Ethiopia. 2009. “External Sector Djibouti. Developments.� . Sudan Tribune. 2009. “Ethiopia, Sudan Sign Series of Notes Cooperation Agreements.� Sudan Tribune. April 23, 1. TTRI calculates the equivalent uniform tariff that 2009. . import shares and import demand elasticity. The Economist Intelligence Unit (EIU). 2009. Country 2. MA-TTRI calculates the equivalent uniform tariff of Report—Ethiopia. EIU. June 2009. trading partners that would keep their level of imports . constant. It is weighted by import values and import The Intergovernmental Authority on Development demand elasticities of trading partners. (IGAD). 2008. “IGAD Member States and 3. Note that this data are reported for the calendar year, Development Partners Discuss Minimum while local data are reported for the fiscal year. Thus Integration Plan for the Region.� IGAD. November substantive differences may apply as local data for 4, 2008. . 4. IMF, 2009(b), p. 18. World Trade Organization (WTO). “Accessions— Ethiopia.� WTO. . References African Economic Outlook. 2009. “Ethiopia.� African Economic Outlook. May 27, 2009. .