Analysis: Reverse Balkanisation? Trade Integration in South-East Europe

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

In this CEPS working document, author David Kernohan analyses concerns that trade openness in South East Europe is less advanced than it should be.  

Research from the World Bank suggests that trade openness was a major contribution in the transition of the Central and Eastern European Countries (CEECs) that joined the EU in May 2004. However, there is concern that such openness is not evident in South East Europe, and in the former Yugoslav Republics in particular. The study focuses on the issue of whether the present network of bilateral trade arrangements put in place under the Stability Pact has had much effect in boosting trade integration and whether trade within the region is currently at or below its potential.

 

The paper finds that trade patterns are problematic due to the small size of many of the countries in the region.  In many cases, there is an overdependence on trade with old Yugoslav neighbours and often the level of trade is smaller than expected. Plans to extend the Stability Pact matrix of bilateral trade agreements into a pan-regional trade association are likely to be inadequate. The author concludes that a better option would be to extend the present Customs Union with Turkey to include trade with the entire South East European zone of countries linked to the EU.

 

To read the full paper, click here.

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