Ethiopia and Somalia's decision to enter technical talks over Ethiopia's maritime access to Somalia's ports will reduce the likelihood of military clashes between the two sides in the short term, and Turkey's ability to position itself as the main mediator in the dispute will bolster Ankara's influence in the Horn of Africa. On Dec. 12, Ethiopian Prime Minister Abiy Ahmed and Somali President Hassan Sheikh Mohamud issued a joint declaration to resolve their bilateral dispute regarding Ethiopia's maritime port deal with Somalia's breakaway region of Somaliland struck in January, following a third round of mediation talks hosted by Turkish President Recep Tayyip Erdogan. The agreement reaffirmed both countries' respect for their mutual territorial integrity while acknowledging the ''potentially diverse benefits'' of Ethiopia securing access to the sea. Moreover, Ethiopia and Somalia agreed to work towards finalizing commercial agreements that enable Addis Ababa to secure ''reliable, secure and sustainable'' maritime access through Somalia, including through contracts and lease agreements. To that end, the two parties agreed to engage in technical negotiations that are due to begin by the end of February 2025 and be signed by June 2025. In addition, Ethiopia and Somalia agreed to resolve potential disagreements through dialogue, with Turkey to act as a mediator. Importantly, the declaration does not formally require Ethiopia to scrap its contentious maritime port deal with Somaliland. 

• The first two rounds of Turkey-led mediation talks took place in July and August, but the third round was postponed from September to December due to surging tensions between Ethiopia and Somalia. 
• Somali officials have claimed that Ethiopia retracted its memorandum of understanding reached with Somaliland, but Ethiopia has not confirmed this. The memorandum of understanding set the basis for Ethiopia to recognize the breakaway region's independence in exchange for Somaliland granting landlocked Ethiopia military and commercial access to the Gulf of Aden port of Berbera. It was to be complemented by a legally binding treaty, which has yet to be announced. 

The agreement comes as the Horn of Africa has witnessed surging tensions following Ethiopia's signing of a port deal with Somaliland, which prompted Somalia to strengthen defense ties with Egypt and Eritrea and led to growing concerns about a military escalation in the region. Somalia strongly denounced Ethiopia's maritime port deal with Somaliland, stating that it was an act of aggression and warning that it could result in war between the two countries. In June, Somalia said that it would expel Ethiopia's 8,000-11,000 troops deployed in the country to counter the activity of al Qaeda-affiliated al Shabaab by the end of 2024 if Ethiopia did not scrap its agreement with Somaliland. Moreover, Somalia launched a diplomatic campaign to increase pressure on Ethiopia by strengthening ties with countries in the region. Somalia notably struck a defense partnership with Egypt, Ethiopia's greatest geopolitical rival, in August, and Cairo rapidly began the deployment of heavy weapons and military personnel to Somalia. Moreover, in October, Eritrean President Isaias Afwerki held a trilateral summit with his Egyptian and Somali counterparts in which the three countries vowed to ''confront interference'' in each other's internal affairs. Together with the fast-approaching deadline for Ethiopia to withdraw its troops from Somalia, this led to growing concerns about skirmishes erupting between Ethiopian and Somali troops. In early December, tensions escalated further following the emergence of clashes between Somalia's federal government and the southern state of Jubaland, where Ethiopian troops are based. 

The agreement will lower Ethiopia-Somalia tensions and significantly reduce the risk of a severe military escalation in early 2025, which will enable Abiy and Mohamud to focus on tackling domestic challenges, but tensions could resurge if the two sides cannot successfully conclude technical negotiations. By reopening channels for diplomatic dialogue, the agreement significantly reduces the likelihood of a severe military escalation between the two sides for the duration of technical talks, thereby mitigating potential disruptions to counter-terrorism operations against al Shabaab. Moreover, the agreement will enable Abiy and Mohamud to focus on consolidating power domestically as both leaders are confronted with mounting internal challenges. In Ethiopia, Abiy faces a worsening security crisis in the northern Amhara region, with ethnonationalist Fano militants launching frequent attacks on the region's large cities. Moreover, socioeconomic grievances in the country are at risk of surging following the Ethiopian birr's free float, which enabled Abiy to secure external funding from the International Monetary Fund and the World Bank but caused the currency to depreciate by over 50%. In Somalia, Mohamud's push to shift the country's electoral system to universal suffrage has triggered a backlash from several federal member states, and the central government will likely leverage the de-escalation of tensions with Ethiopia to end the dispute with Jubaland and mend ties with the northern state of Puntland, with which tensions have surged over electoral reforms. While this suggests that Ethiopia and Somalia's leadership have strong incentives to sustain bilateral talks in the coming months, disagreements could still arise during the technical negotiations, such as regarding the pricing, location and duration of Ethiopia's leasing rights. Should the two countries fail to finalize the technical negotiations by June 2025, this would likely trigger a resurgence in bilateral tensions. 

• In November, the International Monetary Fund forecasted that Ethiopia's inflation would peak at 29% in mid- to late-2025, up from 17.5% in September. 

Turkey's position as the primary mediator in the dispute will enhance its influence in the Horn of Africa, but the agreement is likely to aggrieve Egypt, as it is set to bolster Ethiopia's regional standing and could pave the way for Addis Ababa to develop naval facilities in Somalia over the long term. Erdogan's ability to position Turkey as the main mediator of the Ethiopia-Somalia dispute marks the culmination of over a decade of outreach to the region, which fits within Ankara's broader efforts to shore up its image and extend influence in the Muslim world. Turkey will likely pressure both sides to reach a compromise, and Ankara's role in mediating the dispute means that Turkish companies will likely play a major role in the implementation of commercial agreements, such as the construction of new ports and roads. Moreover, it sets a precedent for Ankara to broker more agreements in the Horn of Africa on terms that are favorable to its interests. However, the agreement is likely to aggrieve Egypt as it undermines Egyptian efforts to isolate its regional rival and paves the way for Ethiopia to strengthen its strategic position in the region by diversifying its maritime access away from Djibouti. The agreement also opens the possibility of Ethiopia establishing naval facilities in Somalia in the coming decades, as it sets the stage for Ethiopia to obtain leasing rights at Somali ports. However, Egypt would strongly oppose this, as it could reinforce Addis Ababa's leverage over Cairo by granting it power-projection capabilities in the Bab el-Mandeb strait at the southern entrance of the Red Sea.

• While the region has witnessed competition between Turkey and the United Arab Emirates over the past decade, the Ethiopia-Somalia agreement is not directly at odds with Emirati interests in the region, even though Turkey could leverage it to gain a long-term commercial advantage.