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Trade Liberalization Strategies: What Could South Eastern Europe Learn From CEFTA and BFTA?

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Author Info
Theodora Kosma
Antonis Adam
James McHugh

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Abstract

This paper explores the effectiveness of the Central European Free Trade Area (CEFTA) and the Baltic Free Trade Area (BFTA). Estimates from a gravity model and bilateral trade data support the view that both CEFTA and BFTA helped expand regional trade and limit the emergence of a "hub-and-spoke" relationship between the CEECs and the European Union (EU). These empirical conclusions carry some important policy implications for the "second wave" of prospective EU members among Southeastern European Countries (SEECs). The paper argues that the SEECs should reconsider their bilateral approach to trade liberalization and move towards a multilateral free-trade area as exemplified by both the CEFTA and BFTA.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 03/239.

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Length: 31 pages
Date of creation: 11 Dec 2003
Date of revision:
Handle: RePEc:imf:imfwpa:03/239

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Related research
Keywords: Trade liberalization ; Europe ; Baltic countries ; International trade ; Economic models ;

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Paas, Tiiu, 2002. "Gravity Approach for Exploring Baltic Sea Regional Integration in the Field of International Trade," Discussion Paper Series 26379, Hamburg Institute of International Economics. [Downloadable!]
  2. Polachek, Solomon W. & Kim, Moon-Kak, 1994. "Panel estimates of the gender earnings gap : Individual-specific intercept and individual-specific slope models," Journal of Econometrics, Elsevier, vol. 61(1), pages 23-42, March. [Downloadable!] (restricted)
  3. Hummels, David & Levinsohn, James, 1995. "Monopolistic Competition and International Trade: Reconsidering the Evidence," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 799-836, August. [Downloadable!] (restricted)
    Other versions:
  4. Richard Baldwin, 1993. "A Domino Theory of Regionalism," NBER Working Papers 4465, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Matthew McQueen, 2002. "The EU's Free-trade Agreements with Developing Countries: A Case of Wishful Thinking?," The World Economy, Blackwell Publishing, vol. 25(9), pages 1369-1385, 09. [Downloadable!] (restricted)
  6. Adam, Antonis & Moutos, Thomas, 2002. "The Political Economy of EU Enlargement: Or, Why Japan is not a Candidate Country?," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  7. Choi, E. Kwan, 2002. "Trade and the adoption of a universal language," International Review of Economics & Finance, Elsevier, vol. 11(3), pages 265-275. [Downloadable!] (restricted)
    Other versions:
  8. Richard E. Baldwin & Joseph F. Francois & Richard Portes, 1997. "The costs and benefits of eastern enlargement: the impact on the EU and central Europe," Economic Policy, CEPR, CES, MSH, vol. 12(24), pages 125-176, 04. [Downloadable!] (restricted)
  9. Deardoff, A.V., 1995. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," Working Papers 382, Research Seminar in International Economics, University of Michigan.
  10. repec:fth:michin:382 is not listed on IDEAS
  11. Alan V. Deardorff, 1995. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," NBER Working Papers 5377, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  12. Egger, Peter, 2000. "A note on the proper econometric specification of the gravity equation," Economics Letters, Elsevier, vol. 66(1), pages 25-31, January. [Downloadable!] (restricted)
    Other versions:
  13. Levy, Philip I, 1997. "A Political-Economic Analysis of Free-Trade Agreements," American Economic Review, American Economic Association, vol. 87(4), pages 506-19, September. [Downloadable!] (restricted)
  14. Laszlo Matyas, 1997. "Proper Econometric Specification of the Gravity Model," The World Economy, Blackwell Publishing, vol. 20(3), pages 363-368, 05. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Agustin Carstens, 2004. "Making Regional Economic Integration Work," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 43(4), pages 335-352. [Downloadable!]
  2. Antonis Adam & Thomas Moutos, 2005. "Turkish Delight for Some, Cold Turkey for Others?: The Effects of the EU-Turkey Customs Union," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  3. Cipollina, Maria & Salvatici, Luca, 2007. "EU and developing countries: an analysis of preferential margins on agricultural trade flows," Working Papers 7219, TRADEAG - Agricultural Trade Agreements. [Downloadable!]
  4. Luca De Benedictis & Roberta De Santis & Claudio Vicarelli, 2005. "Hub-and-Spoke or Else? Free Trade Agreements in the Enlarged EU - A Gravity Model Estimate," Economics Working Papers 037, European Network of Economic Policy Research Institutes. [Downloadable!]
  5. Alessia Amighini & Stefano Chiarlone, 2005. "New comparative advantages in the Central and Eastern European countries," LIUC Papers in Economics 182, Cattaneo University (LIUC). [Downloadable!]
  6. Julia Spies & Helena Marques, 2006. "Trade Effects of the Europe Agreements," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 274/2006, Department of Economics, University of Hohenheim, Germany. [Downloadable!]
  7. Luca De Benedictis & Roberta De Santis & Claudio Vicarelli, 2005. "Hub-and-Spoke or else? Free trade agreements in the “enlarged” European Union," ISAE Working Papers 52, ISAE - Institute for Studies and Economic Analyses - (Rome, ITALY). [Downloadable!]
    Other versions:
  8. Cardamone, Paola, 2007. "A survey of the assessments of the effectiveness of Preferential Trade Agreements using gravity models," Working Papers 7282, TRADEAG - Agricultural Trade Agreements. [Downloadable!]
    Other versions:
  9. repec:bep:glecon:7:2007:4:4 is not listed on IDEAS
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