Trade Similarities between Eastern and Southern Europe: Opportunities or Competition?
University of the Balearic Islands - Departament d'Economia Aplicada
July 23, 2008
Estey Centre Journal of International Law & Trade Policy, Vol. 3, No. 2, pp. 199-221, 2002
Using only transition period data, this paper analyses revealed comparative advantages (RCAs) and specialisations to identify the 3-digit SITC (Standard International Trade Classification) sectors in which the EU's trade liberalisation with Eastern European applicants may represent opportunities or competition between them and EU South. First, during the transition period potential competition occurs in labour-intensive sectors. Over one-third of Eastern European and EU South exports overlap both in the labour-intensive factor content and in the destination market (EU North). Second, the clothing and footwear export unit values of Visegrad countries are very close to those of EU South, indicating similar quality levels. Third, the greatest potential opportunities for Eastern Europe lie in R&D-intensive sectors. Finally, the benefits for EU South of trade liberalisation with Eastern Europe, if any, lie in obtaining cheaper imports rather than in exporting to the Eastern European market.
Keywords: Eastern Europe, EU enlargement, Southern Europe, trade, transition
JEL Classification: F14, F15, L6Accepted Paper Series
Date posted: July 24, 2008
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