Tradeflow Study - UNDP Black Sea Trade and Investment Promotion ...

Based on the competitiveness assessment, the indicative trade potential for services and the
commitments made by BSEC countries in the WTO to liberalise trade in services, the study
proposes a number of service sectors which presents opportunities for intra-BSEC trade
promotion.
According to the indicative intra-regional trade potential, travel services have the highest
potential for intra-regional growth in the region. Export of travel services in the region have
generally outperformed the world market indicating competitiveness for Albania, Armenia,
Azerbaijan, Romania, Russia, Turkey and Ukraine. Furthermore, commitments made by the
WTO members of BSEC suggest that in the area of Market Access, there are relatively few
limitations to accessing the market in modes 1-3. This therefore assumes that establishing a
commercial presence is also relatively unrestricted which should foster investment. Countries
have also made commitments to predominantly not discriminate against foreign service
providers in modes 1-3 in travel services. A notable exception includes Turkey. Mode 4 tends
to be unbound making this form of delivery unlikely to have much potential. Overall travel
services present large opportunities for intra-regional trade promotion.
The second largest intra-regional trade potential was identified as being in Transportation
services. Exports of transportation services have outperformed the world market for Albania,
Bulgaria, Russia and Turkey. Moreover, growth in imports for Azerbaijan, Bulgaria, Georgia,
Romania, Russia, Turkey and Ukraine has outperformed the world market, indicating a
vibrant market for exporting. Market Access in modes 2 and 3 are virtually entirely liberalised
for WTO members of BSEC (with the exception of Albania which has some restrictions for
mode 2 subsectors, and Romania and Turkey who have unbound commitments in mode 3).
In mode 1, all countries apply a number of restrictions for around half the subsectors of
transportation. Typically, all countries apply mode 4 restrictions, with the exception of Turkey
which has no limitations on market access for 78% of the subsectors in transportation. In
terms of National Treatment, most countries have liberalised all sub sectors for modes 2 and
3 (except Greece and Romania for commercial presence). Most countries maintain unbound
limitations on National Treatment for mode 1 for a significant amount of subsectors of
transportation services. Armenia, Georgia and Greece maintain unbound limitations for mode
4, while Albania, Romania and to a lesser extent Turkey, have no restriction on mode 4 trade.
Overall transportation services present some important opportunities for intra-regional trade
promotion, but significant restrictions and impediments to trade apply which need to be
addressed in order to fully benefit from the regional market.
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