2012年-CEPS欧洲政策研究中心_Reverse_Balkanisation_Trade_Integration_in_South_19页_270kb

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

Core Content

This paper, authored by David Kernohan and published by CEPS in August 2006, examines the state of trade integration in South-East Europe (SEE), particularly among the former Yugoslav Republics (FYRs), in light of the EU's expansion and ongoing regional development efforts. It compares the trade performance of SEE countries with that of the former Central and Eastern European Countries (CEECs) that joined the EU in 2004, highlighting that trade openness in SEE remains significantly lower than in CEECs.

Main Points

• Trade Openness and EU Integration: The World Bank and other studies suggest that trade openness was crucial for the successful integration of CEECs into the EU. However, in SEE, trade integration is still underdeveloped, with many countries relying heavily on trade with old Yugoslav neighbors rather than expanding more broadly.

• Current Trade Patterns: Despite some improvements in trade with the EU, intra-SEE trade remains weak. The data shows that while exports to the EU have grown, trade within the region is still limited. For example, in 2004, intra-SEE trade accounted for only 3–7% of total exports, with Turkey's trade share being particularly low.

• Impact of the Stability Pact: The Stability Pact for South East Europe, initiated in 1999, aimed to create a network of bilateral trade agreements. However, these agreements have not significantly boosted trade integration, and there are still issues with non-tariff barriers, rules of origin, and other trade frictions. The paper questions whether the current plan to expand the Stability Pact into a pan-regional trade agreement will be sufficient.

• Need for Deeper Integration: The paper argues that a customs union with Turkey, or a more comprehensive EU institutional arrangement, may be more effective in promoting trade openness and integration in the region. A pan-regional trade agreement (RTA) may be inadequate due to its limited scope in covering key sectors like agriculture and services.

• Econometric Analysis: Using a gravity model and panel data econometric techniques, the paper estimates trade potential and finds that the impact of regional trade agreements (FTAs) is not statistically significant. However, the FYR dummy variable shows a positive and somewhat significant effect, suggesting that trade among these countries is still higher than expected compared to trade with other regional partners.

• Challenges in Regional Integration: The paper highlights that the region's trade dynamics are influenced by historical legacies, including the Balkan wars, which disrupted infrastructure and trade flows. These challenges may require stronger institutional support and more coordinated trade policies to overcome.

Key Findings

• Trade openness is a critical factor in economic transition and integration.
• Intra-SEE trade remains weak compared to the CEECs, with many countries over-relying on old Yugoslav neighbors.
• The Stability Pact's bilateral approach has not significantly boosted trade integration.
• A pan-regional trade agreement may be insufficient due to limited coverage and unresolved trade barriers.
• A customs union with Turkey or deeper EU policy arrangements could offer a more effective solution.
• The econometric analysis suggests that trade among FYRs is still higher than expected, but the impact of FTAs is not statistically significant.
• Regional integration in SEE is hindered by structural and institutional challenges, including poor infrastructure and trade policies.

Conclusion

The paper concludes that while there are signs of progress in trade with the EU, the current approach to regional integration in SEE is inadequate. A more comprehensive and inclusive institutional framework, possibly involving a customs union with Turkey or a deeper EU policy arrangement, is needed to stimulate meaningful trade integration and growth in the region.