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

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. Abbreviations BSEC EBRD EU EUROSTAT FDI GDP GFCF HS IMF IIT ITC MFN OECD RCA TC TI TradeSim UNDP UNSD WTO Black Sea Economic Cooperation European Bank for Reconstruction and Development European Union of 27 Member States European Statistical Office Foreign Direct Investment Gross Domestic Product Gross Fixed Capital Formation Harmonised System International Monetary Fund Intra-industry Trade (index) International Trade Centre UNCTAD/WTO Most Favoured Nation Organisation of Economic Cooperation and Development Revealed Comparative Advantage Trade Complementarity (index) Trade Intensity (index) Trade Simulation Model developed by ITC United Nations Development Programme United Nations Statistical Division World Trade Organisation 6/135
Executive Summary The BSEC region has experienced significant macroeconomic, political, institutional and regulatory reforms in the last decade, with the effect of dramatically altering the business environment in which firms operate and creating an enabling framework for fostering foreign investment in emerging manufacturing and service sectors. The Member States of the Black Sea Economic Cooperation (BSEC) are diverse in terms of population size, economic power, production and export structures, as well as the depth and breadth of trade and investment policies. The performance of trade is equally disparate, with Russia, Turkey and Greece dominating trade flows, owing in particular to their economic size since they account for over four fifths of the GDP of BSEC, but also due to the diversification of their production base. Member States remain predominantly entrenched in merchandise trade. Total trade in goods represents between 33 percent (Greece) and 120 percent of GDP (Moldova), while total trade in services represents between 8 percent of GDP (Russia) and 30 percent of GDP (Moldova). Thus the outward orientation varies between countries though all countries trade more in goods than services. The study on trade and investment potential for the BSEC is a quantitative analysis of trade and investment flows amongst Member States, and identifies a number of sectors in which trade between Member States is underperforming according to the estimated potentials. The study draws on a number of trade indicators which are used to calculate trade complementarity in intra and inter industry trade, as well as more classical theoretical economic models to identify underperformance of trade. According to the indicators computed in the study, the highest levels of trade complementarity exist between Azerbaijan (exporter) and Ukraine (importer), Greece (exporter) and Bulgaria (importer), Romania (exporter) and Ukraine (importer), Russia (exporter) and Romania (importer) and Ukraine (importer), and Ukraine (exporter) and Russia (importer). The level of intra-industry intra-regional trade for Bulgaria, Romania, Greece, Russia and Turkey is relatively high, whereas it is very low for Albania, Armenia, Azerbaijan, Serbia and Montenegro, and Ukraine. Using an econometric model for estimating bilateral untapped potential, a number of key sectors which present opportunities for intra-regional trade appear to be under exploited. The 7/135
Page 1: Black Sea Economic Cooperation: Stu
Page 4 and 5: . Table of Contents Abbreviations .
Page 6 and 7: . Table 15d. Greece’s Commitments
Page 10 and 11: . econometric model, referred to as
Page 12 and 13: . In this regard, travel services h
Page 14 and 15: . stock and foreign affiliates acti
Page 16 and 17: Current account balance (% of GDP)
Page 18 and 19: % of GDP . The dynamism of the priv
Page 20 and 21: . I.2. Background to Trade and Inve
Page 22 and 23: . II. Trade Potential and Opportuni
Page 24 and 25: . As mentioned earlier, the major e
Page 26 and 27: Imports Perspective . There are cer
Page 28 and 29: . II.1.3 Intra-industry trade betwe
Page 30 and 31: j j . x is the value of total expo
Page 32 and 33: . Table 10 provides a summary of th
Page 34 and 35: . Table 11. Twenty five products wi
Page 36 and 37: . Wood and wood products, in parti
Page 38 and 39: . Metal products, in particular HS
Page 40 and 41: Maximum MFN in Region (%) . make cr
Page 42 and 43: . II.4. Services With the exception
Page 44 and 45: . Table 13. Performance of trade in
Page 46 and 47: . Table 14a. Indicative Service Exp
Page 48 and 49: . Table 14e. Indicative Service Exp
Page 50 and 51: . Table 14i. Indicative Service Exp
Page 52 and 53: . divided by each mode of supply, f
Page 54 and 55: . Table 15b. Armenia’s Commitment
Page 56 and 57: . Table 15d. Greece’s Commitments
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. Table 15f. Turkey’s Commitments
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. Other commercial services (which
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. Table 16 Foreign direct investmen
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. In terms of existence of a legal
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. III.3. Sectoral opportunities BSE
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. service sector (retail, business
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. Table 23b. FDI in Bulgaria (2005)
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. Table 23d. FDI in Romania (2005)
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. Table 23f. FDI in Turkey (2005) I
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. 74/135
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. of trade in services performance,
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. Egger, P. (2002), An Econometric
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. World Bank (2005), Trade, Transp
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. Annex 1. Trade Indicators 82/135
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. Table A2. Major Import Partners f
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. Table A4. Major Import by Product
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Albania Armenia Azerbaijan Bulgaria
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. HS Description ALB ARM AZE BGR GE
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. Table A7 Trade intensity in BSEC
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. HS Description ALB ARM AZE BGR GE
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. country I and country j’s capit
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. Annex 2.3. Results of Gravity Equ
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. Georgia Sector / Exports to ALB A
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. Russia Sector / Exports to ALB AR
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. Annex 2.4. Results of Trade Flow
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Annex 2.5. Results of Trade Flow An
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. Note: Excludes energy and tobacco
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