REGIONAL COOPERATION AND ECONOMIC INTEGRATION
REGIONAL COOPERATION AND ECONOMIC INTEGRATION REGIONAL COOPERATION AND ECONOMIC INTEGRATION
REGIONAL TRADE AGREEMENTS AND REGIONAL COOPERATION distribution of the achieved liberalized trade benefits then it might be understandable the following facts. 1. The reasons for slow progress in Doha agenda implementation – the problem is in different size of expected benefits for more and less developed nations, based on differences of GDP levels and productions structure causing internal distribution of trade benefits. 2. Interest for trade liberalization expectedly could be stronger in nations where majority of population might expect free trade benefits – normally that would be expected to be countries with relative abundant labour force. 3. In case of countries with similar levels of GDP free trade positive effect are not so much uneven, causing that interest to liberalize trade is generally supported. Especial in the case of similar production structure presuming similarities in abundance of production factors. The reasoning in the point 1 seems well supported by arguments and problems accompanying efforts to finalize the Doha agenda liberalization program (Doha...). Conclusions suggested in point 2 are a bit confusing. In fact the most populated nation’s which no doubt have relative abundance of labour are not front runners in the efforts for multilateral trade liberalization. Why so might have a few different explanations. On is that real impact of labour masses in labour reach countries (BRIC for instance) on political agendas of the governments is not really strong due to political tradition - specific and new democratic structures in such societies. Countries with relative abundance of capital in opposite are not showing strong labour/workers opposition to trade liberalization. In present crises we see same reservation as explained above when national government are not willing to help transitional countries although hey are part of EU. In many cases in more developed nation labour force is not openly against trade liberalization although it threatens their relative incomes and in longer run as well their employment. Incomes are already proportionately high and will be with more trade additionally increased although less that incomes of the owners of the capital. In longer run they will have to seek new employment due to economy restructuring. In many countries – especially EU social support programs offer help during employment restructuring. Till recently in developed economies the labour force has not seen effects of trade opening as substantial problem and danger to their incomes and employment. Conclusions suggested in point 3 above are consistent with the findings of different analyses searching for the answers when or at what conditions regional trade cooperation – concluding of EIAs – might be more beneficial in increasing GDP (El-Agraa, 2004). More developed countries – countries with higher GDP – and well developed production structure are potentially partner who can benefit more in case of EIAs introduction. EU in practice intends to implement such theoretical concept. The Copenhagen European Council of 21 and 22 June 1993 defines the economic and political conditions for accession to the European Union. Within the Copenhagen enlargement criteria one is related to specific market development level of candidate countries. It demands functional market economy, which among other requires certain level of economic development. Often this criterion within last enlargements was not really applied in practice. If this criteria in the future will play its role than for candidate and accessing countries to the EU the success in developing their economies and markets as the bases for EU joining is extremely important. 9
PART I: 3. CEFTA regional cooperation and potential to increase trade openness Based on above theoretical overview opening of trade among similar partners is easier and potential more equally beneficial to all countries participating. In case of Western Balkan Countries (WBCs) who are CEFTA members we could expect that more liberal trade could be beatifically to all. First question obviously goes to the fact that CEFTA on bilateral bases opens (in general) trade in the region. With such general status as always could be found some application problems. Let us mention some of them. Table 2: Intra regional export and import relative to total export and import of the region (%, 2005) Import Alb. B&H Cro. FRYMac. Export Mont Neg. Serbia Total intra.r.export/ total export Alb. - (-) 0,0 (0,0) 0,0 (0,0) 0,0 (0,0) 0,9 (0,5) 0,4 (0,0) 1,7 B&H 0,2 (0,2) - (-) 20,5 (2,6) 0,9 (0,7) 1,9 (3,9) 14,6 (3,4) 38,2 Cro. FRYMac. 0,2 (0,8) 1,3 (1,0) 13,0 (17,9) 2,5 (0,7) - (-) 4,0 (0,4) 0,8 (2,5) - (-) 0,8 (7,0) 0,7 (1,2) 3,2 (3,0) 21,8 (4,3) 18,1 30,3 Mont.Neg. 1,1 (0,2) 5,3 (0,4) 1,4 (0,0) 0,5 (0,0) - (-) 36,8 (1,9) 45,1 Serbia 10 0,1 (0,1) 18,5 (11,8) 3,6 (0,9) 5,8 (8,1) 9,0 (34,8) Total intra regional import/t.import (2,4) (30,8) (4,0) (11,4) (47,4) (12,7) Calculated from table: Trade among countries in the region, with EU and World in 2005, see A. Kumar, CEP Istanbul Documents, December 2008. In the CETA one of the EU candidate countries is not included - that is Turkey. For WBC region their partnership in RTA with Turkey cold be potentially beneficial. In CEFTA is Moldova whose status towards the EU accession process is totally undefined. Till recently (Commission, 2009) among members of CEFTA the diagonal accumulation of product origin was not possible. Why this recent, at first glance just technical change is really important for future faster growth in CEFTA and Turkey region based on easier – more liberalized - trade To answer the question two clarifications beside above theoretical framework are necessary: a) Is present regional trade of CEFTA and Turkey developed enough to hope that trade liberalized on the bases of FTAs agreements could develop positive effects on economic growth of members At that stage we would leave aside effects of internal society distribution of such potential benefits. b) What is diagonal cumlation of product origin and how cat it help to additional increase in regional GDPs growth - (-) 36,9
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- Page 5 and 6: Skopje, 15.10.2009 Dear Colleagues,
- Page 8 and 9: CONTENTS: PART I: REGIONAL TRADE AG
- Page 10: Ph.D. Sanja Đurđić THE RULE OF L
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PART I:<br />
3. CEFTA regional cooperation and potential to increase trade openness<br />
Based on above theoretical overview opening of trade among similar partners is easier and<br />
potential more equally beneficial to all countries participating. In case of Western Balkan<br />
Countries (WBCs) who are CEFTA members we could expect that more liberal trade could<br />
be beatifically to all. First question obviously goes to the fact that CEFTA on bilateral bases<br />
opens (in general) trade in the region. With such general status as always could be found<br />
some application problems. Let us mention some of them.<br />
Table 2: Intra regional export and import relative to total export<br />
and import of the region (%, 2005)<br />
Import Alb. B&H Cro. FRYMac.<br />
Export<br />
Mont<br />
Neg.<br />
Serbia<br />
Total<br />
intra.r.export/<br />
total export<br />
Alb.<br />
-<br />
(-)<br />
0,0<br />
(0,0)<br />
0,0<br />
(0,0)<br />
0,0<br />
(0,0)<br />
0,9<br />
(0,5)<br />
0,4<br />
(0,0)<br />
1,7<br />
B&H<br />
0,2<br />
(0,2)<br />
-<br />
(-)<br />
20,5<br />
(2,6)<br />
0,9<br />
(0,7)<br />
1,9<br />
(3,9)<br />
14,6<br />
(3,4)<br />
38,2<br />
Cro.<br />
FRYMac.<br />
0,2<br />
(0,8)<br />
1,3<br />
(1,0)<br />
13,0<br />
(17,9)<br />
2,5<br />
(0,7)<br />
-<br />
(-)<br />
4,0<br />
(0,4)<br />
0,8<br />
(2,5)<br />
-<br />
(-)<br />
0,8<br />
(7,0)<br />
0,7<br />
(1,2)<br />
3,2<br />
(3,0)<br />
21,8<br />
(4,3)<br />
18,1<br />
30,3<br />
Mont.Neg.<br />
1,1<br />
(0,2)<br />
5,3<br />
(0,4)<br />
1,4<br />
(0,0)<br />
0,5<br />
(0,0)<br />
-<br />
(-)<br />
36,8<br />
(1,9)<br />
45,1<br />
Serbia<br />
10<br />
0,1<br />
(0,1)<br />
18,5<br />
(11,8)<br />
3,6<br />
(0,9)<br />
5,8<br />
(8,1)<br />
9,0<br />
(34,8)<br />
Total intra<br />
regional<br />
import/t.import<br />
(2,4) (30,8) (4,0) (11,4) (47,4) (12,7)<br />
Calculated from table: Trade among countries in the region, with EU and World in 2005, see A. Kumar,<br />
CEP Istanbul Documents, December 2008.<br />
In the CETA one of the EU candidate countries is not included - that is Turkey. For WBC<br />
region their partnership in RTA with Turkey cold be potentially beneficial. In CEFTA is<br />
Moldova whose status towards the EU accession process is totally undefined. Till recently<br />
(Commission, 2009) among members of CEFTA the diagonal accumulation of product<br />
origin was not possible.<br />
Why this recent, at first glance just technical change is really important for future faster<br />
growth in CEFTA and Turkey region based on easier – more liberalized - trade To answer<br />
the question two clarifications beside above theoretical framework are necessary:<br />
a) Is present regional trade of CEFTA and Turkey developed enough to hope that<br />
trade liberalized on the bases of FTAs agreements could develop positive effects<br />
on economic growth of members At that stage we would leave aside effects of<br />
internal society distribution of such potential benefits.<br />
b) What is diagonal cumlation of product origin and how cat it help to additional<br />
increase in regional GDPs growth<br />
-<br />
(-)<br />
36,9
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