engleski

The Effects of Trade Liberalisation Between Croatia and Bosnia and Hercegovina

Trade liberalisation brings long-term benefits. Nonetheless, in order to be able to realise those benefits, a creation of a competitive economic structure is required, which would make it possible to successfully participate in the international division of labour. Building from this fact, this paper analyzes the effects of trade liberalisation between the SEEC. To that end, a method of intra-industry trade has been applied on the example of Croatia, in order to establish dynamic effects of changes in trade flows. Low level of trade integration and weak midterm growth prospects in inter-sectoral trade represent the biggest threat for the countries in the Region. The threat could be manifested through rising adjustment costs, as a consequence of trade liberalisation, and could, therefore, jeopardize economic stability. Low level of trade integration poses a problem even from the aspect of the policy of international community towards South East Europe in the framework of the Stability Pact.

trade liberalisation; SEEC; intra-industry trade; marginal intra-industry trade

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