Trade Integration and Liberalization: Possible Solutions to Keep Food Supply Chains Alive

Exploration and better exploitation of comparative and competitive advantages in the agricultural sector contribute to the increases and structural changes in food production, processing, and export. Investigations of such opportunities are particularly relevant for smaller countries of Eastern Europe, which possess significant advantages in agricultural production compared to bigger and more developed EU producers, but often fail to translate them into a stable competitive position in the global market. This chapter analyzes performances of the fourteen Danube region countries along major macroeconomic parameters (GDP, inflation, unemployment, and shares of public debt, external debt, FDI, current account deficits, exports, and imports in GDP). In the case of the Republic of Serbia, the authors estimate the level of specialization and comparative advantage in agricultural exports and analyze the volume and foreign trade balance between Serbia and the EU and the CEFTA. The Balassa index (Revealed Comparative Advantage) and the Grubel-Lloyd index of intra-industrial exchange are used to identify and measure Serbia’s comparative advantages across twenty-five categories of agricultural and food products in 2015–2020. The findings on individual levels of comparative and competitive advantages can be used in a cross-section analysis of the agricultural sector performance and planning of future foreign trade developments.