Although nominally a member of the Non-Aligned Movement, after the 1974 revolution, Ethiopia moved into a close relationship with the Soviet Union and its allies and supported their international policies and positions until the change of government in 1991. Today, Ethiopia has very good relations with the United States and the West, especially in responding to regional instability and supporting war on terrorism and, increasingly, through economic involvement.

Ethiopia's relations with Eritrea remained tense and unresolved. Following a brutal 1998-2000 border war in which tens of thousands died on both sides, the two countries signed a peace agreement in December 2000. A five-member independent international commission--Eritrean Ethiopia Boundary Commission (EEBC)--issued a decision in April 2002 and follow-up observations in March 2003 delimiting the border between the two countries, but thus far the parties have not agreed to final demarcation. The United Nations Mission in Ethiopia and Eritrea (UNMEE) peacekeeping mission patrols a 25-kilometer-wide Temporary Security Zone (TSZ) within Eritrea separating the two countries; a few minor incidents of violence have occurred, all between local villagers and militia or armed opposition groups supported by the other side. Both countries insist they will not instigate fighting, but both also remain prepared for any eventuality. Regarding its neighbor Somalia, the lack of central government and factional fighting in Somalia contributes to tensions along the boundaries of the two countries. Ethiopia has recently entered into a loose tripartite (nonmilitary) cooperation with Sudan and Yemen.