Trade Developments of New EU Member Countries: Defying Theoretical Fundamentals or Adjusting to New Realities?
The paper deals with the foreign trade performance of the new member countries in their first five years of membership (and, with two years for Bulgaria and Romania). The first part of the statistical survey focuses on trade developments supporting and/or defying some key issues of trade theory. Trade creation vs. trade diversion, trade balance between more and less developed countries of the same free trade area as well as differences in the commodity structure of exports due to different levels of development constitute the main pillars of the analysis. It is found that trade creation can be clearly identified in the dynamic growth of trade among the new member countries. On the contrary, the share of the old member countries experienced a partly dramatic decrease. For several reasons, growing extra-EU export orientation characterized most new members, a key challenge to traditional theories. Trade balance between new and old members points to a diversified picture. However, in case of the more developed new members that could attract substantial amount of foreign capital into their export-oriented industries, foreign trade balance with the EU-15 registers relevant trade surplus, in line with giving priority to getting incorporated into the global division of labour through the international activities of transnational companies (including, of course, of Europe-rooted ones). Mainly for the same countries, neither the commodity pattern of exports seems to support traditional theoretical hypotheses. However, both regarding trade balance and commodity structure, the new member countries of the EU can be classified into rather different groups. The second part analyzes the impact of the crisis on trade developments with special regard to the Visegrád-4 countries plus Slovenia. Following a statistical survey illustrating short-term trends, special attention is paid to the emerging protectionist efforts in selected countries of the EU-15, as well as to the export-related impact of depreciated national currencies in some Central European member states. Finally, the vulnerability of selected new member states (concerning volume, structure, geographic orientation) characterized by clear and successful export-orientation strategies in the past two decades is addressed, with special reference to the possibility or desirability of any radical change in the catching-up-based and export-oriented growth pattern.
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Volume (Year): (2009)
Issue (Month): 3 ()
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