The Djibouti–Ethiopia border was formed during the 19th century via the formation of French Somaliland corresponding to the Ethiopian Empire in 1897.
The border is essential for trading system for both countries where 97% import and export conducted and the Ethio-Djibouti corridor dominated the trading system of IGAD region with other routes such as Port Sudan, Berbera and Mombasa being of limited importance.
The modern Djibouti and Ethiopia's boundary shares no disputed territories, and thus have a good relation.
There is substantial cross-border trading involving long-standing economic, commercial and cultural relations.
[3] On 20 September 2020, the new entry point of the corridor was opened near the town Balho at the Northern border to Djibouti.