engleski

The analysis of the cohesive trade elements between the EU and the SEEC-7

South East European countries are small countries and thus their development depends critically on international trade. Those countries are lagging in economic development, both behind the EU and other transition countries in the region. The SEECs have unbalanced industrial structures, and the structural reform policies have been weak while privatization and enterprise reform have not given the expected results. We analyze trade patterns with the EU for the following countries: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Macedonia, Romania and Serbia and Montenegro. The aim of this paper is to provide an empirical analysis of intra-industry trade between SEECs and the EU. Theoretical background of IIT will be discussed and then the pattern of IIT will be investigated across categories of custom tariffs CN and trends in this pattern examined. Bilateral trade data at four-digit level of CN between SEECs and the EU over the period 1996-2002 are used for this research. The Grubel-Lloyd index as an indicator of the degree of industrial specification is applied to analyze SEECs ability to compete in a more open trade settings and on the strong European market. This type of analysis enables the comparison with the similar research conducted for the CEEC, the countries that have already joined the EU. At the beginning of 1990s, the SEECs IIT levels with the EU ranged around 0. Since the trade patterns evolve over time, and the European integration process should influence significantly both the trade patterns and the catching up process, the obtained results confirm changes in the trade of manufactured goods between the SEECs and the EU during the first years of the Stabilization and Association Agreement implementation period. Most industries exhibited large increases in IIT, so our results provide useful insight into the crucial economic indicators for the analyzed group of countries.

trade patterns; IIT; SEEC-7; integration process

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