Washington is ending Addis Ababa's involvement in the African Growth and Opportunity Act due to "gross violations of internationally recognised human rights," US President Joe Biden said.
US President Joe Biden has booted Ethiopia from a vital trade pact due to rights concerns as the historic US ally declared a state of emergency over rebel advances north of the capital.
Frustrated after repeated warnings to Prime Minister Abiy Ahmed about suffering in the nearly year-old conflict, the Biden administration said on Tuesday it was removing Ethiopia, as well as coup-hit Guinea and Mali, from the African Growth and Opportunity Act (AGOA).
In a notice to Congress, Biden said that Ethiopia's eligibility would end on January 1 over "gross violations of internationally recognised human rights."
"Despite intensive engagement between the United States and the Governments of Ethiopia, Guinea, and Mali, these governments have failed to address United States concerns about their non-compliance with the AGOA eligibility criteria," the president wrote in a letter.
Ethiopia trade ministry said in a statement that it was "extremely disappointed" by the US decision.
"These actions will reverse significant economic gains in our country and unfairly impact and harm women and children," the statement said, adding that the decision "must be reversed".
Fighting in Tigray intensifies
AGOA, a landmark 2000 law credited with boosting industry in sub-Saharan Africa, removed US duties on most exports if countries adhere to good governance.
Ethiopia's exports to the United States have risen from $28 million in 2000 to nearly $300 million in 2020, with almost half the goods falling under AGOA, according to Abiy's government.
The Ethiopian government alleged in November 2020 that the Tigray People's Liberation Forces (TPLF) raided a key military installation in the country's north, killing soldiers and looting sizable military hardware.
The following day, the government launched what it said was a sweeping law enforcement operation against the group’s leaders that has led to continuing hostilities against Tigray rebels.
Tigray rebels in recent days have claimed control of two key cities and have not ruled out marching on Addis Ababa.
The conflict has crippled humanitarian access for nearly half a million people facing famine-like conditions in the Tigray region.
The UN has warned that Ethiopian government bombardments, fighting and fuel shortages are affecting the ability of aid partners to distribute aid in the region.
Aid deliveries have ground to a halt in areas where stocks of food and other relief items have been depleted.
According to the UN, 2 million people have been internally displaced and thousands have died in the conflicts.