The aim of this paper is to examine the relation between trade liberalisation, economic integration and the intensity of intra-industry trade among three countries of different development levels in a Free trade Area context. The theoretical analysis indicates that the benefits of creating a Free Trade Area between the Western Balkan countries and the European Community (EC), following the predictions of the Association and Stabilisation Agreements will be unevenly spread between member-states of the EC and the Western Balkan countries. The second part of this paper examines the actual level of intra-industry trade between the Western Balkan countries and the EC. The level and the trend of intra-industry trade between the two Eastern Balkan countries, Romania and Bulgaria, member-states of the EC since 2007 and which reflect the provisions of Europe Agreements are also investigated.
The purpose of this paper is to first apply the theory of trade in vertically differentiated products in a Customs Union context and second to find out the effects of the Customs Union between the European Union and Turkey. This is done both at a theoretical and at an empirical level. Based on these assumptions, the theoretical analysis indicates
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