Trade, Regional Integration and Economic Growth: MEDA Region and the Western Balkan Countries

In times of crises as well as economic booms, openness to trade and foreign direct investment are the factors that stimulate the recovery of the global economy. For Mediterranean Region (MEDA) and Western Balkans Countries (WBC) enhancing trade cooperation among themselves and with other European Union (EU) countries is seen as crucial step for trade growth and economic development of the region. Recent political turmoil in some of the Mediterranean countries leads to serious problems in their economies. The impact of global recession and problems in Euro zone, MEDA main trade partner, has dangerous consequences on the already low level of both MEDA trade with most non-MEDA countries and intra-MEDA trade. As much as it has been achieved with the signing of the Association Agreements, the current level of economic integration of the EU-Mediterranean region has been slower than expected and regional trade integration between MEDA countries is still limited. On the other hand, Western Balkans countries are currently on the pathway to future EU integration, adoption and implementation of the acquis communautaire, the set of EU rules and regulations. The improved market access instruments (elimination of all non-tariff barriers, rules of origin) aim to enable better conditions for trade and investment and prepares the countries for joining the European Union Single Market and faster economic growth. Western Balkan exporters are on the markets of the EU and countries of ex-Yugoslavia (CEFTA) with their exports gradually increasing, following the process of transition towards a functional market economy.