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Special Graduate Schools
Graduate School of International Studies
Department of International Trade
International Trade
3. Theses(Master)
에티오피아의 WTO접근
- Alternative Title
- Nebiyu, Kokeb Lemecha
- Author(s)
- Lemecha, Nebiyu Kokeb
- Alternative Author(s)
- Nebiyu, Kokeb Lemecha
- Advisor
- 정경일
- Department
- 국제대학원 국제통상학과
- Publisher
- Graduate School of International Studies Ajou University
- Publication Year
- 2006-08
- Language
- eng
- Alternative Abstract
- ABSTRACT Vulnerable economies including Ethiopia, most of them if not all of them are belong to LDCs Category, see themselves either as victims of globalization or as outcasts that are bypassed by it. At the same time they recognize that they have no other choice but integrating themselves with MTS and cope up with the wave of globalization, which calls for a broader set of rules as the influence of cross-border externalities increases in importance and affect the economy of countries irrespective of their position in MTS. It is in this context that the Ethiopian government has decided to apply for membership in 2003 to change its observership status into a full fledged member of the WTO. This study has been conducted therefore to give Ethiopian policy makers an insight about the challenges Ethiopia is going to face and the opportunities that will be avail towards its long journey on the slippery road of accession and the aftermath. The opportunities of WTO accession have been addressed by assessing the benefits, while the challenges have been addressed through analyzing the costs associated with WTO accession. Towards this end the study identified the birth defect in the prevailing WTO Accession provision, Article XII by showing how the loophole in this provision open the door for incumbent WTO members to abuse the credibility of WTO by wring commercial advantage out of weaker economic partners from the existing literature regarding acceding countries experience and empirical studies conducted in the field of WTO accession. Though its acceptability by WTO members seems very slim, the modification of Article XII to address the problem of new applicant countries in general and applicants which belong to LDC category in particular has been suggested as a solution. A simple graphical event study technique has also been employed to show the relationship between export, Import, total trade, FDI inflow, degree of aggregate openness as measured by (Total Trade/ GDP) on one side and WTO accession on the other by taking into consideration the sixteen acceded countries foreign trade and FDI statistics. Five recently acceded countries have been excluded from consideration in the event study, due to insufficient post accession data. In general assuming other factors that can affect all the variables mentioned above remain constant a positive relationship between them and WTO accession has been observed with some exceptions, the explanation for the exceptions is no better than a wild guess and beyond the scope of this study as it needs a detailed country by country study. Regarding the challenges it is found out that the existence of WTO-plus commitments and WTO-minus rights, which are evidences of fundamentally flawed accession negotiations and manifestations of “power play” is rampant and has been observed in both multilateral and bilateral trade negotiations between WP members and applicant countries. In addition to these WTO-plus commitments and WTO-minus rights, the accession negotiations also ensure that newly acceding countries undertake commitments that are far greater than those made by WTO members. This has been evidenced by a recent empirical study, which focuses on service sector commitments as addressed on chapter four of this study. The experience of Nepal, Cambodia and Vanuatu substantiate and confirm the above findings by serving as a litmus test to reveal the very antithesis of the WTO credo. Since every accession process have its own dynamics and each country face “unique” accession case, trade negotiators of Ethiopia should show a maximum effort in making the most out of the WTO accession; as acceding countries do not receive what they deserve but what they negotiate. Finally though imbalance is expected between the benefits that will accrue to Ethiopia and other members due to the power play and the upper hand the incumbent members have during accession negotiation from the point of view of efficiency and equity, Ethiopia likely to enjoy the potential benefit of export increase and FDI attraction through improved market access and through signaling a better policy environment to foreign investors which would be brought by WTO accession as indicated in the out come of this study. Despite the expected imbalance in the accession negotiation, Ethiopia’s WTO accession therefore be expected to address the major problem of the country and will contribute for the country’s development endeavour, provided that the supply side constraints of the country are identified and will be abolished in the short run. As President Park Chung Hee of Korea once said,” We can not expect the whole drought-stricken paddy land to become evenly watered immediately after we start to water it. We ought to have the patience and wisdom to share ten bushels latter rather than the impatience and ignorance to insist on sharing a package of seeds evenly now.” Thus, even though the price Ethiopia is expected to pay as a cost of entry to the WTO is high and it can not equally be benefited with its rich partner from the outcome of the negotiation process, it is still better for Ethiopia to integrate with MTS to secure predictable and transparent market access opportunities to boost its export, attract FDI inflow and reap other benefits, which have a positive externality effect in the overall efficiency of its economic performance in the long run. So Ethiopia’s Government decision to apply for membership is justified as per the outcome of this study and the government should pursue its effort to liberalize its trade regime to accelerate the accession process, such that systematically fight the undesirable consequences of power play by creating strong partnership with other LDCs.
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