Tax Compliance
Ethiopia’s Trade Relation with the EAC and Sudan
Ethiopian Economic Association Lead Researcher Kibre Moges
Sponsored by Friedrich Ebert Stiftung
May 2008 Addis Ababa
Table of Contents Page List of Tables List of Figures Abbreviations Executive Summary iv v v vi
1. Introduction
1
2. Challenges and Opportunities of South-South Trade 2.1 Configuration of the current international trade integration 2.2 Policy initiated South-South trade integration 2.3 Opportunities and Challenges of trade Integration in East Africa
2 2 3 6
3. Economic Structure and Market Networks 3.1 Economic structure 3.2 Potential market size 3.3 Creating market access opportunities
8 8 9 10
4. The Trade Policy Regime in Ethiopia 4.1 Trade agreements 4.2 Export trade incentive schemes 4.3 The Tariff Regimes 4.4 Non-tariff barriers
14 14 18 21 29
5. Trade Flows 5.1 Export trade structure 5.2 Import structure 5.3 Ethiopia’s trade balance with the EAC and Sudan
30 30 35 41
ii
6. Intensity of Trade Integration between Ethiopia, the EAC & Sudan 7. Trade Complementarities between Ethiopia, the EAC & Sudan 8. Trade Competitiveness 8.1 Export diversification 8.2 Revealed Comparative Advantage 8.3 Trade restrictiveness 8.4 Other trade costs influencing competitiveness
42 46 48 49 51 53 58
9. Summary and Recommendations
62
References Annex Table 1a Annex Table 1b Annex Table 2
67 69 73 78
iii
List of Tables Page Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8: Table 9: Table 10: Table 11: Table 12: South-South Exports 2005 Economic Structure of East African Countries Market size indicators Access to telecommunication services Eligibility for EU and USA GSP access Summary of MFN applied tariffs rates MFN applied duty rates by product group Frequency distribution Share of duty free imports in each product category Implicit import duty rates Annual growth of Ethiopia’s export to the EAC and Sudan Import share of EAC and Sudan from Ethiopia by broad product
Ethiopian Economic Association Lead Researcher Kibre Moges
Sponsored by Friedrich Ebert Stiftung
May 2008 Addis Ababa
Table of Contents Page List of Tables List of Figures Abbreviations Executive Summary iv v v vi
1. Introduction
1
2. Challenges and Opportunities of South-South Trade 2.1 Configuration of the current international trade integration 2.2 Policy initiated South-South trade integration 2.3 Opportunities and Challenges of trade Integration in East Africa
2 2 3 6
3. Economic Structure and Market Networks 3.1 Economic structure 3.2 Potential market size 3.3 Creating market access opportunities
8 8 9 10
4. The Trade Policy Regime in Ethiopia 4.1 Trade agreements 4.2 Export trade incentive schemes 4.3 The Tariff Regimes 4.4 Non-tariff barriers
14 14 18 21 29
5. Trade Flows 5.1 Export trade structure 5.2 Import structure 5.3 Ethiopia’s trade balance with the EAC and Sudan
30 30 35 41
ii
6. Intensity of Trade Integration between Ethiopia, the EAC & Sudan 7. Trade Complementarities between Ethiopia, the EAC & Sudan 8. Trade Competitiveness 8.1 Export diversification 8.2 Revealed Comparative Advantage 8.3 Trade restrictiveness 8.4 Other trade costs influencing competitiveness
42 46 48 49 51 53 58
9. Summary and Recommendations
62
References Annex Table 1a Annex Table 1b Annex Table 2
67 69 73 78
iii
List of Tables Page Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8: Table 9: Table 10: Table 11: Table 12: South-South Exports 2005 Economic Structure of East African Countries Market size indicators Access to telecommunication services Eligibility for EU and USA GSP access Summary of MFN applied tariffs rates MFN applied duty rates by product group Frequency distribution Share of duty free imports in each product category Implicit import duty rates Annual growth of Ethiopia’s export to the EAC and Sudan Import share of EAC and Sudan from Ethiopia by broad product