A Panel Data Analysis for Bilateral Trade of Ethiopia and EAC

This study tries to explore the trade relations between Ethiopia and East African community countries in general and specifically the Trade Integration for cooperation with the East African Community Partner countries. The study has a main objective of investigating the main determinants of Ethiopiäs bilateral Trade and addresses the question of whether Ethiopia has untapped Bilateral Trade and export potentials with the East African community countries or not. It also Analyze existing Trade agreements and protocols and also explores the unexploited export potentials that the country that may have in the East Africa community countries using the an econometric analysis of augmented gravity model estimation by Generalized Least Square (GLS) estimation technique over a panel data of the four bilateral Trade partners of Ethiopia.The estimated coefficients then used to analyze the existing bilateral Trade and predict the potential that the country could role in the EAC countries. The paper identifies the significant factors of influence on bilateral trade flows, exports and imports by employing Gravity variables and some supplementary dummy variables for estimation