9. April 2021

Djibouti Trade Agreements

Filed under: Allgemein — @ 05:39

Djibouti`s economy is a service-oriented economy that focuses on the port, railways, public service and foreign military presence. Revenues from services, including port services provisions, exceed revenues from exports of goods. Although the trade balance is in sharp deficit, the services and revenue accounts are still in surplus. International aid also plays an important role in Djibouti`s economy. Re-exports traditionally account for a significant share of exports, which account for about 80% of total exports. Djibouti`s merchandise exports are mainly made up of live animals and hides. Djibouti`s main trading partners are Ethiopia and Somalia, as well as some Arab countries, including Yemen and Saudi Arabia, as well as China and France. Djibouti`s economy is very open to foreign trade, accounting for 328% of GDP (World Bank, 2018). Djibouti has a free trade regime and a free trade area status in East Africa. It is a member of the WTO, the IGAD (Intergovernmental Authority for Development), COMESA (Common Market for East and South Africa), the Arab League and the African Union, the African Continental Free Trade Agreement and a series of bilateral agreements. Djibouti has shown great interest in promoting regional economic integration, particularly with Ethiopia.

Djibouti mainly exports cattle to Gulf countries and exports vehicles, machinery, food and cement. The country imports mainly petroleum products, food products, vehicles and other capital goods. According to the most recent UNCTAD data, the country`s top five export targets in 2019 were Ethiopia, the European Union, Somalia and Brazil. The country imports goods and services mainly from the European Union, the United Arab Emirates, Japan and Ethiopia. The economy of Ethiopia and Djibouti is heavily dependent on the port of Djibouti, which is traditionally the only maritime canvassing for Ethiopia`s inland region. The recent peace between Ethiopia and Eritrea, with the consequent opportunity for Ethiopia to take advantage of Eritrea`s ports, could change this situation. Djibouti`s trade balance is structurally negative, as it does not export much, with the exception of cattle, and imports large quantities of petroleum products, food and capital goods.

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