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The Effectiveness of Preferential Trade Liberalization in Central and Eastern Europe

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  • Andrzej Cieślik

    ()
    (Faculty of Economic Sciences, University of Warsaw)

  • Jan Hagemejer

    ()
    (Faculty of Economic Sciences, University of Warsaw; Economic Institute, National Bank of Poland)

Abstract

After the collapse of communism in Central and Eastern Europe (CEE) many countries in the region radically liberalized their foreign trade regimes in the 1990s. In particular preferential trade liberalization in the CEE countries has been promoted by the European Union in the form of the association agreements that involved “vertical” trade liberalization between the EU and countries in Central and Eastern Europe. In addition to this the CEE countries liberalized trade “horizontally” among themselves in the form of sub-regional and bilateral free trade agreements. In this paper, we use the generalized gravity equation estimated on bilateral trade data for ten CEE countries during the period of 1993-2004 to evaluate the effectiveness of preferential trade liberalization in Central and Eastern Europe. We find that all forms of preferential trade liberalization positively contributed to the expansion of trade of the CEE countries but their impact was country specific.

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File URL: http://www.wne.uw.edu.pl/inf/wyd/WP/WNE_WP61.pdf
File Function: First version, 2011
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Bibliographic Info

Paper provided by Faculty of Economic Sciences, University of Warsaw in its series Working Papers with number 2011-21.

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Length: 21 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:war:wpaper:2011-21

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Keywords: bilateral trade; gravity equation; preferential trade liberalization;

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  1. 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, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
  2. Antonis Adam & James McHugh & Theodora Kosma, 2003. "Trade Liberalization Strategies," IMF Working Papers 03/239, International Monetary Fund.
  3. Piazolo, Daniel, 1997. "Trade Integration between Eastern and Western Europe: Policies Follow the Market," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 12, pages 259-297.
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