Ethiopia, Regional Integration and the COMESA Free Trade Area

The paper examines Ethiopia's position regarding the COMESA FTA, concluding that while trade liberalisation could increase general welfare through cheaper imports, it poses significant risks to Ethiopia's infant manufacturing sector, potentially leading to job losses and revenue reductions. It highlights that Ethiopia is pursuing regional integration through bilateral infrastructure and energy projects—such as the LAPSSET Corridor and hydropower exports—rather than formal trade liberalisation.

• Ethiopia's manufacturing sector is currently uncompetitive and in its 'infant stage', making it ill-equipped to compete with other COMESA members or export high-quality goods at competitive prices.
• Joining the COMESA FTA is projected to result in a net increase in unemployment because job losses in contracting sectors, particularly manufacturing, would not be fully offset by gains in other areas.
• While trade liberalisation would likely improve overall household welfare by reducing the prices of imported goods, it would lead to a significant loss in government tax revenue from imports.
• Ethiopia's trade with COMESA members is currently small but growing, with essential imports such as petroleum and fertiliser being key components; Sudan's share of petroleum imports rose from less than 4% in 2005 to 12% in 2011.
• Ethiopia is pursuing regional integration through strategic bilateral infrastructure and energy projects, including the Lamu Port–South Sudan–Ethiopia Transport (LAPSSET) Corridor and the export of hydropower to Sudan, Djibouti, and Kenya.
• The Ethiopian government's 'developmental state' ideology, which involves controlling financial and foreign exchange flows and maintaining state-owned 'cash cows' in telecommunications and air transport, creates a conflict with the liberalisation requirements of an FTA.
• Security interdependence in the Horn of Africa is as strong as economic interdependence, with Ethiopia's central location and military strength making it a key regional player and a strategic ally for the US and EU in combating terrorism.

APA

Makonnen, T., & Lulie, H. (2014). Ethiopia, Regional Integration and the COMESA Free Trade Area. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2014/08/Occasional-Paper-198.pdf

Chicago

Makonnen, Tewodros, and Halellujah Lulie. Ethiopia, Regional Integration and the COMESA Free Trade Area. South African Institute of International Affairs, 2014. https://saiia.org.za/wp-content/uploads/2014/08/Occasional-Paper-198.pdf.

Wikipedia

{{cite report |last1=Makonnen |first1=Tewodros |last2=Lulie |first2=Halellujah |title=Ethiopia, Regional Integration and the COMESA Free Trade Area |publisher=South African Institute of International Affairs |date=August 2014 |url=https://saiia.org.za/wp-content/uploads/2014/08/Occasional-Paper-198.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{makonnen2014ethiopia, author = {Makonnen, Tewodros and Lulie, Halellujah}, title = {{Ethiopia, Regional Integration and the COMESA Free Trade Area}}, institution = {South African Institute of International Affairs}, year = {2014}, month = aug, url = {https://saiia.org.za/wp-content/uploads/2014/08/Occasional-Paper-198.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }