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The Impact of Regional Economic Cooperation on the Ethiopian Manufacturing sector


<p><em>A computable partial equilibrium (CPE) model is employed to quantify the welfare implications of COMESA-FTA on the Ethiopian manufacturing sector. The results of the model indicate that the value of imports have expanded as a result of tariff elimination on imports from COMESA member countries. This increase in value of imports led to consumption expansion, implying an increase in consumer&#39;s surplus. There is also negative budgetary implication implied by the loss in tariff revenue. The net welfare effect, which is the combined effect determined by the relative magnitudes these effects, reveals a welfare loss of 0.06% of GDP. Over all, the static welfare effect of complete tariff removal on commodities imported from COMESA member countries appeared to be welfare depressing. However, this should be treated with caution since it does not show the dynamic effects relating to market size, efficiency gains and economies of scale that might have been attained in the long run. Moreover, this analysis focuses only on the manufacturing sector, it doest not indicate the economy wide effects of complete tariff removal on imported commodities from COMESA member countries.</em></p>

Corporate Author: 
Ethiopian Economic Association/Ethiopian Economic Policy Research Institute (EEA/EEPRI)
Ethiopian Economic Association (EEA)
Primary Descriptors: 

<p>FTA; welfare; tariff</p>

Secondary Descriptor: 

<p>region, and integration</p>

Geographic Descriptors: 
Cataloge Date: 
Broad Subject heading: 
Call Number: 
330.05 ETH JOU
Serial Key Title: 
Ethiopian Journal of Economics
Publication catagory: 
Content type: 
April, 2001
Publication date: 
2013-03-02 00:00:00
Forum or Discussion date: 
2013-03-02 00:00:00
Place of publication: 
Addis Ababa, Ethiopia
Type of material: 
Serial (Journal)
Current frequency: