REGIONAL COOPERATION AND ECONOMIC INTEGRATION

Part I
REGIONAL TRADE AGREEMENTS
AND REGIONAL COOPERATION
Andrej Kumar, Ph. D.
Full - time professor
Jean Monnet Chair
University of Ljubljana,
Faculty of Economics
Slovenia
THEORETICAL BACKGROUND AND SOME PRACTICAL
EVIDENCES ON RTAS AND TRADE OPENNESS
Abstract:
International trade and integration theory to some extend over simplifies the expected
positive results of the trade liberalization. In the theory is not enough to observe that actual
value of benefits measured by GDP or GNI increases are at large different among the states
included into the trade liberalization. Differences are to be observed to get multilateral and
regional trade liberalization efforts successful.
Based on regional integration theory and general trade theory advocating maximizing of
benefits in totally open economies we assessed, based on different researches and texts,
that countries in region with similar production structure and similar level of GDP have
potentially better chances to create larger benefits out of regional trade liberalization.
Based on theory and evidences accelerated trade increase in WBCs region is highly
needed due to low levels of present GDPs and on the other side by request of the EU
to fulfill the criteria of effective and functional market economy. Formal introduction of
diagonal cumulation of rules of origin by EU Commission in 2009 will help to boost the
regional trade increase.
Key words: International trade theory, trade liberalization effects, regional economic
integration, rules of origin.
INTRODUCTION
Opening of economies is, along with the improvement of human capital, the key driver of
economic national growth. Countries succeeding in increasing trade and attracting FDIs
grow faster than countries that fail to become sufficiently open to the global economy.
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