Trade Liberalization Strategies: What Could South Eastern Europe Learn From Cefta and Bfta?

Abstract

This Working Paper should not be reported as representing views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper explores the effectiveness of the Central European Free Trade Area (CEFTA) and the Baltic Free Trade Area (BFTA). Estimates from a gravity model and bilateral trade data support the view that both CEFTA and BFTA helped expand regional trade and limit the emergence of a "hub-and-spoke" relationship between the CEECs and the European Union (EU). These empirical conclusions carry some important policy implications for the "second wave" of prospective EU members among Southeastern European Countries (SEECs). The paper argues that the SEECs should reconsider their bilateral approach to trade liberalization and move towards a multilateral free-trade area as exemplified by both the CEFTA and BFTA.

Trade Effects of the Europe Agreements

“…The fact that these countries were not well integrated with the EU at the time of the entry into force of the agreements gives some support to the natural trading partner hypothesis. As for the aggregate trade effects of the Interim and Europe Agreements, our result is in line with previous estimates by Adam, Kosma and McHugh (2003). However, we believe that the authors underestimate the agreement's effect since they only partly eliminate the omitted variable biases.…”

Foreign direct investments in the role of strengthening the export competitiveness of the Serbian economy

“…Their exports to the EU in the period 1993 -2001 increased from 29.712 million to 91.769 million USD, respectively, for over three times (Adam et al, 2003). As the evidence of improving export situation of these countries, we can mention the fact that exports of Czechoslovakia in 1990 amounted to 10.7 billion USD to the total exports of the Czech Republic and Slovakia in 2001 which reached 46 billion USD (Kovačević, 2005).…”

Los acuerdos comerciales bilaterales: el caso Colombiano (1990-2015)

“…Por otra parte, se han desarrollado investigaciones puramente empíricas de los efectos del bilateralismo eje-radios; en Europa (Martin & Turrion, 2001;Laaser & Schrader, 2002;Adam, Kosma & McHugh, 2003;Paas, 2003), en Israel (Deltas et al, 2006) y en Singapur, Japón, y Estados Unidos (Chong & Hur, 2008).…”