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Measuring the Effects of Trade Liberalization in Kosovo

Author

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  • Mario Holzner

    () (The Vienna Institute for International Economic Studies, wiiw)

  • Florin Peci

Abstract

Similar to other countries in the European periphery, Kosovo lacks competitiveness, has adopted the euro as its national currency and started an integration process with the EU. The next milestone in this process is the signing of an FTA with the EU. We simulate full trade liberalization vis-à-vis the EU, using the Global Simulation Model. Our results suggest a slight output loss in almost all industries in Kosovo due to a drop in prices. Moreover the government budget is expected to lose about 5% of its revenues due to the tariff cut. A shift towards more direct taxation and measures aimed at improving the investment climate in Kosovo are recommended.

Suggested Citation

  • Mario Holzner & Florin Peci, 2012. "Measuring the Effects of Trade Liberalization in Kosovo," wiiw Working Papers 85, The Vienna Institute for International Economic Studies, wiiw.
  • Handle: RePEc:wii:wpaper:85
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    References listed on IDEAS

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    1. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, January.
    2. Mutambatsere, Emelly, 2006. "Trade Policy Reforms in the Cereals Sector of the SADC Region: Implications on Food Security," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25380, International Association of Agricultural Economists.
    3. Joze P. Damijan & José de Sousa & Olivier Lamotte, 2006. "The Effect of Trade Liberalization in South-Eastern European Countries," wiiw Balkan Observatory Working Papers 70, The Vienna Institute for International Economic Studies, wiiw.
    4. Hess, Sebastian & von Cramon-Taubadel, Stephan, 2008. "Agricultural Trade Policy Modelling: Insights from a Meta-Analysis of Doha Development Agenda Outcomes," Commissioned Papers 43466, Canadian Agricultural Trade Policy Research Network.
    5. David Vanzetti & Santiago Fernandez de Córdoba & Veronica Chau, 2005. "Banana Split: How Eu Policies Divide Global Producers," UNCTAD Blue Series Papers 31, United Nations Conference on Trade and Development.
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    Cited by:

    1. Burkitbayeva, Saule & Kerr, William A., 2013. "The Accession of Kazakhstan, Russia and Ukraine to the WTO: What will it Mean for the World Trade in Wheat?," Commissioned Papers 158891, Canadian Agricultural Trade Policy Research Network.

    More about this item

    Keywords

    trade policy simulation; Kosovo; EU integration;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • P33 - Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid

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