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Trade Policy in Ethiopia, 1991–2016

The chapter reviews the trade policy regimes and the evolution of the trade policy reforms implemented in Ethiopia since 1993. Trade policy reform measures included import liberalization through rationalization of the tariff structure and reduction of quantitative restrictions, simplified licensing procedures, the introduction of market-oriented and more transparent allocation of foreign exchange, new investment codes, and labour and public enterprise laws. Additional trade policy instruments were introduced to promote investment, exports and industrialization. By the early 2000s, Ethiopia was moving away from the conventional market-oriented policy reforms, and instead pursuing a developmental state approach. In addition, Ethiopia has taken concrete steps with regard to its accession to the WTO, and is a member of a number of continental and regional integration efforts. The chapter assesses how Ethiopia balances its goal of pursuing a trade policy that supports its long-term development objective with the goal of regional and global integration.