1
TRADE ACTIVITY BETWEEN THE EU AND ITS
2
NEIGHBOURING COUNTRIES: TRENDS AND
3
POTENTIAL
4 DIMITRIS KALLIORAS
AQ5 * &ANNAMARIA PINNA**
5 * University of Thessaly, Department of Planning and Regional Development; SEED Center, Voulos,
6 Greece. E-mail: dkallior@uth.gr
7 ** University of Cagliari, Department of Economics; CRENoS, Cagliari, Italy. E-mail:
8 ampinna@unica.it
9 Received: September, 2013; accepted March, 2015
10 ABSTRACT
11 The objective of the paper is to examine whether trade activity intensifies over time as the
12 outcome of signed bilateral trade agreements. Focusing on (the trade component of) the
13 European Neighbourhood Policy, the paper conducts a study of trade activity between the EU
14 and its neighbouring countries, attempting to offer a detailed analysis in terms of trade patterns
15 and to investigate whether proximity is combined with higher trade flows, within the framework
16 of a free trade agreement. The analysis utilises data derived from BACI database and covers the
17 period from 1995 to 2011. The findings of the paper indicate that there is a lot of potential for
18 the expansion of trade activity between the EU and its neighbouring countries.
19
20 Key words: EU, ENP, neighbouring countries, trade, trends, potential
21
22 INTRODUCTION
23 Neighbouring countries provide the easiest 24 market access for the majority of tradable
25 goods as trade costs are, ceteris paribus, lower 26 over small distances (Leamer & Levinsohn
27 1995; Evenett & Keller 2002). Furthermore, 28 when one country is much richer than the
29 other, proximity trade is mutually beneficial 30 as the richer country, usually, offers a wide
31 variety of goods, with superior quality, while 32 the poorer country, usually, offers lower
pri-33 ces and attractive productive locations 34 (Venables & Lim~ao 2002; Ago et al. 2006).
35 Free trade agreements (FTAs) are, strongly, 36 based on this argument. Overcoming
37 national borders is meant to create larger 38 economic spaces for exploiting economies of
39 scale, thereby reducing production costs. 40 This means that trade activity among the
41 counterparts involved in a FTA is expected
42
to intensify over time (Burke 1973). The
43
objective of the paper is to examine whether
44
trade activity intensifies over time as the
out-45
come of signed bilateral trade agreements.
46
To this end, focusing on (the trade
compo-47
nent of) the European Neighbourhood
Pol-48
icy (ENP), the paper conducts a study of
49
trade activity between the EU and its
neigh-50
bouring countries, attempting to offer a
51
detailed analysis in terms of trade patterns
52
and to investigate whether proximity is
com-53
bined with higher trade flows, within the
54
framework of a FTA.
55
The recent EU enlargements (i.e. years
56
2004, 2007 and 2013) brought the borders of
57
the EU to a set of countries in the East with
58
historically less intensive economic relations.
59
These countries have been part of the
(for-60
mer) Soviet Union and are characterised by
61
lower development levels and significant
62
institutional and structural deficiencies. At
Tijdschrift voor economische en sociale geografie – 2016, DOI:10.1111/tesg.12193, Vol. 00, No. 00, pp. 00–00.
63 the same time, in the Southern and the
East-64 ern rim of the Mediterranean Sea, the EU is 65 faced with countries that are linked to
indi-66 vidual EU countries through their colonial 67 past. Both bordering areas, in the EU East
68 and the EU South, have been gaining signifi-69 cance as they ‘include emerging economies,
70 energy suppliers, or, simply, a large neigh-71 bouring market, which is crucial for the EU
72 economy’ (Petrakos et al. 2013, p. 2). Thus, 73 the EU launched, in 2004, the ENP, a
uni-74 fied policy framework towards its neighbour-75 ing countries (Wesselink & Boschma 2012).
76 The ENP aims at strengthening the prosper-77 ity, stability and security of the EU, creating
78 a ‘ring of friends’ around the EU political 79 borders. The ENP framework applies to a
80 wide array of neighbouring countries (here-81 inafter: the ENCs); in particular, to Armenia,
82 Azerbaijan, Belarus, Georgia, Moldova and 83 Ukraine (the ENP East) as well as to Algeria,
84 Egypt, Israel, Jordan, Lebanon, Libya, 85 Morocco, Occupied Palestinian Territory
86 (hereinafter: Palestine), Syria and Tunisia 87 (the ENP South).
88 Even though the ENP is a distinct and sepa-89 rate process from the EU enlargement
(Emer-90 son 2004; Browning & Joenniemi 2008), the 91 ENCs operate, in practice, under conditions of
92 ‘neighbourhood Europeanisation’ (Gawrich 93 et al. 2010), tantamount to economic
integra-94 tion. This is because the progressive compli-95 ance with the acquis communautaire (i.e. the
96 corpus of EU laws and policies) is considered 97 to be a necessary condition for the ENCs in
98 order to increase their ‘weight’ on the EU mar-99 ket (Havlik et al. 2012; Petrakos et al. 2013).
100 From the EU perspective, according to the 101 Treaty of Lisbon, in force since 2009, EU
poli-102 cies with a bearing on relations to third coun-103 tries (such as the ENCs) should be guided by
104 the policies related to the internal market as 105 well as by a common set of principles and
106 objectives such as the consolidation and sup-107 port of democracy and the preservation of
108 peace (Koopmann & Wilhelm 2010; Woolcock 109 2010). From the viewpoint of the ENCs, even
110 in the absence of the proper ‘membership 111 anchor’, ‘the European perspective acts as a
112 very strong stimulus for – and facilitator of – 113 economic, political and institutional
develop-114 ment by providing not only the incentives but
115
also the (financial) resources to promote
eco-116
nomic restructuring and institutional
capacity-117
building’ (Monastiriotis et al. 2010, p. 11).
118
To analyse trade flows between the ENCs
119
and the EU as well as between the ENCs and
120
the non-EU countries, the paper utilises trade
121
data, expressed in value terms, derived, mostly,
122
from BACI1 database. The analysis covers the
123
period from 1995 to 2011 so as to gauge the
124
latest shifts operated in trade structures in the
125
countries of interest and world-wide and to
126
describe the situation before and after the
sig-127
nature of the various bilateral trade
agree-128
ments between the EU and the ENCs.
129
The remainder of the paper is as follows:
130
The next section reviews concisely the
inter-131
national trade theories so as to provide a
the-132
oretical insight on the distribution of
133
production and trade activity. The third
sec-134
tion presents the main trends as regards
135
trade activity between the EU and the ENCs.
136
The fourth section attempts to explain the
137
trends provided. The last section of the
138
paper offers the conclusions and some policy
139
recommendations.
140
EXPLAINING TRADE ACTIVITY AND
141
PATTERNS: REVIEW OF TRADE
142
THEORIES
143
How does international trade and the
forma-144
tion of a FTA in particular, affect the
distri-145
bution of production and trade activity
146
within the free trade area? Trade theories
147
may offer valuable insight (see Gandolfo
148
2014 for a comprehensive review).
149
On the basis of the concept of absolute
150
advantage, first mentioned by Smith (1776),
151
the concept of comparative advantage,
for-152
mulated by Ricardo (1817), refers to the
abil-153
ity of a country to produce a particular
154
commodity at a lower opportunity cost over
155
another country. In order to gain from
inter-156
national trade, countries are expected to
157
export commodities for which their relative
158
prices in an autarchy (i.e. no trade) situation
159
are lower than other countries. Building on
160
the concept of comparative advantage, the
161
Heckscher-Ohlin-Samuelson (H-O-S) model
162
(Heckscher 1919; Ohlin 1933; Samuelson
163
164 and trade on the basis of the factor
endow-165 ments of trading countries. In particular, the 166 H-O-S model supports that countries will
167 export commodities that use their abundant 168 and cheap factor(s) of production in order
169 to gain from international trade. Overall, tra-170 ditional theories of international trade
indi-171 cate that gains from international trade 172 should be greatest among countries with the
173 greatest differences either in terms of oppor-174 tunity costs or in terms of factor
endow-175 ments. Hence, international trade should 176 cause countries to export commodities
dis-177 tinctly different from the ones they import. 178 This way, countries may reap the so-called
179 static effects of international trade (Balassa 180 1961). Therefore, on the basis of traditional
181 trade theory, it has been suggested that 182 developing countries (such as the vast
major-183 ity of the ENCs) are likely to gain more form-184 ing a FTA with high-income countries (such
185 as the vast majority of the EU countries) 186 instead of forming a FTA with other
develop-187 ing countries (Venables 2003).
188 Of course, besides the static effects
gener-189 ated for the members of a FTA (especially 190 for the developing ones), the so-called
191 dynamic effects may, also, accrue (Balassa 192 1961). In particular, besides the benefits that
193 may arise in terms of market expansion 194 (Myint 1958) and economies of scale
195 (Krueger 1978), international trade might 196 generate positive externalities and spillover
197 effects by transmitting and disseminating 198 technological progress, knowledge and ideas
199 (Grossman & Helpman 1991; Coe & Help-200 man 1995; Coe et al. 1997). Yet, this might
201 not be the case when trading partners are 202 asymmetric in the sense that they exhibit
203 considerable differences in terms of endow-204 ments and level of technology (Grossman &
205 Helpman 1991; Devereux & Lapham 1994). 206 This means that the positive impact of
inter-207 national trade is expected to be conditioned 208 by the level of development as weak
econo-209 mies, which have a similar structure to their 210 more advanced trade counterparts, may face
211 intense competition. In plain words, interna-212 tional trade might push some countries,
213 especially within a FTA framework, to special-214 ise in low value-added commodities (Young
215 1991; Rivera-Batiz & Xie 1993).
216
Indeed, in an imperfectly competitive
eco-217
nomic environment, comparative advantage is
218
said to be created rather than naturally given,
219
spurring intra-industry exchanges (Poon &
220
Pandit 1996). This provides an explanation to
221
the fact that a growing feature of
contempo-222
rary trade activity – the international exchange
223
of commodities belonging to the same
indus-224
try – takes place between countries that enjoy
225
an advanced level of development (Ruffin
226
1999). The expansion of intra-industry trade
227
activity, mainly, represents firms’ efforts to
228
expand internationally, internalising their
mar-229
ket through vertical integration and engaging
230
in product differentiation (Hummels et al.
231
2001). This means that the level and the type
232
of specialisation are essential parameters as
233
regards the international trade activity. In an
234
open economy, specialisation is related to the
235
export base of an economy (Tiebout 1956).
236
International trade allows for greater
specialisa-237
tion - since domestic demand for some
com-238
modities can be served by imports - allowing
239
inherent and acquired comparative advantages
240
to be exploited more intensively (Weinhold &
241
Rauch 1999). Apparently, trading with more
242
advanced partners, less advanced countries
243
tend to develop (locked-in) an inter-industry
244
(i.e. more trade occurs between sectors rather
245
than within sectors) type of trade activity. This
246
type of trade activity, which imposes a specific
247
economic structure with specialisation typically
248
in labour or resource-intensive economic
activ-249
ities, is the outcome of the inability of the less
250
advanced (and, usually, peripheral) countries
251
to compete (successfully) with their more
252
advanced counterparts in the markets for
253
capital-intensive and knowledge-intensive
eco-254
nomic activities (Br€ulhart & Elliott 1998).
255
Moving from traditional to modern
theo-256
ries of international trade, the idea that
257
developing countries have to increase the
258
variety of their export basket so as to stabilise
259
exports earnings and upgrade value-added,
260
start to prevail (Conkling & McConnell 1973;
261
Amable 2000; Eaton & Kortum 2001; Hidalgo
262
et al. 2007; WTO 2010). Such an idea
sug-263
gests, if anything, that in order to determine
264
the nature and the quality of trade activity
265
between the EU and the ENCs, the analysis
266
of trade by type of product is extremely
267
268 THE MAIN FACTS OF TRADE ACTIVITY
269 AMONG THE EU AND ITS
270 NEIGHBOURING COUNTRIES
271 THE importance of neighbouring countries
272 for the EU trade activity – the ENCs do not
273 play a key role in EU trade. In the list of the
274 most important exports and imports EU part-275 ners, for 2011, none of the ENCs are in the
276 first ten positions (Table
T1 1). Despite their
277 proximity, the ENCs do not trade much with
278 the EU. Of course, some of them occupy an
279
important position: in particular, Ukraine
280
and Algeria are the most important EU
281
exports and imports partners, respectively; in
282
contrast, Armenia and Georgia (for exports)
283
and Armenia and Jordan (for imports) are
284
the least important ones. The gravity
285
approach suggests that the size of trade
activ-286
ity is proportional to the economic size of
287
the partners involved and inversely
propor-288
tional to their distance (Tinbergen 1962).
289
Thus, disproportional relative size may
pro-290
vide an explanation for the rather low levels
Table 1. Major EU export and import partners, year 2011.
EU exports to EU imports from
(year 2011) (year 2011)
Rank Partner Volume
(million e)
Rank Partner Volume
(million e) 1 US 260,553 1 China 292,130 2 China 136,222 2 Russia 198,343 3 Switzerland 121,671 3 US 184,246 4 Russia 108,434 4 Norway 93,450 5 Turkey 72,671 5 Switzerland 91,205 6 Japan 48,968 6 Japan 67,452 7 Norway 46,529 7 Turkey 47,593 8 India 40,425 8 India 39,315 9 Brazil 35,729 9 Brazil 37,776
10 UAE 32,615 10 South Korea 36,101
19 Ukraine 21,196 12 Algeria 27,678 21 Algeria 17,205 24 Ukraine 14,987 22 Israel 16,836 25 Azerbaijan 14,842 24 Morocco 15,168 29 Israel 12,645 25 Egypt 13,944 33 Libya 10,437 31 Tunisia 10,931 35 Tunisia 9,874 38 Belarus 7,218 36 Egypt 9,511 43 Lebanon 5,267 39 Morocco 8,689 55 Jordan 3,258 51 Belarus 4,220 57 Syria 3,020 57 Syria 3,071 60 Azerbaijan 2,862 81 Moldova 842 65 Libya 2,066 88 Georgia 614 67 Moldova 1,858 100 Lebanon 411 72 Georgia 1,588 109 Armenia 319 107 Armenia 641 111 Jordan 313
3 ENCs as a whole 123,059 4 ENCs as a whole 118,454
10 Eastern ENCs 35,364 11 Eastern ENCs 35,825
5 Southern & Middle East
ENCs (without Israel)
70,859 6 Southern & Middle East
ENCs (without Israel)
69,984
5 Southern & Middle East
ENCs (with Israel)
87,695 6 Southern & Middle East
ENCs (with Israel)
82,629
291 of trade activity between the EU and the
292 each of the ENCs. Of course, disproportional 293 relative size is not an issue for countries such
294 as Norway and Switzerland. Thereafter, a bet-295 ter role for countries which share land
bor-296 ders (Eastern ENCs) and seashores 297 (Southern ENCs) with the EU would be
298 expected. It is quite clear that size, distance 299 and borders play a different role with
refer-300 ence to the ENCs area.
301 Yet, what would happen if the ENCs where
302 a single country? Adding the values of EU 303 exports and imports to all ENCs, makes the
304 ENCs (as a whole) the third and the fourth, 305 respectively, most important EU partner.
306 This means that the ENCs as a whole are 307 more important EU trading partners
com-308 pared to economies like Japan, Turkey, India 309 and Brazil, making evident that proximity
310 increases its role with size. This exercise indi-311 cates that the neighbouring area of the EU
312 suffers the presence of many borders. When 313 taking into account each single ENC, its role
314 in EU trade is weak and not predominant in 315 the global scene. This fact finds a
confirma-316 tion, also, when looking at the activity of EU 317 firms in the ENCs area. In particular, Pinna
318 et al. (2015) show that only 6 per cent of a
319 representative sample of EU exporting firms
320 have a neighbouring country in the three 321 most important destination markets. Of
322 course, aggregating the ENCs as a single eco-323 nomic space, things change. ENCs gain a key
324 role in international trade, becoming one of 325 the most important EU partners, both in
326 exports and imports.
327 The trade structure of neighbouring
328 countries, by origin and destination – during
329 the last fifteen years, the ENCs have 330 increased their trade activity with the EU
331 countries.2 In particular, the Eastern ENCs 332 and the new EU countries (EU12)3 have
333 been exhibiting the highest increases. Yet, in 334 2010, the Southern ENCs and the old EU
335 countries (EU 15) have a dominant position, 336 in terms of both exports and imports shares,
337 in relation to the total ENCs and EU shares, 338 respectively. Noteworthy also, is the fact that
339 while, at the beginning of the period under 340 consideration (year 1995), the ENCs were,
341 mainly, importers, at the end of the period
342
(year 2010), the situation, as regards the
EU-343
ENCs trade relations, is more balanced.
344
Adopting a wider view, leaving the
Euro-345
pean perspective, for including all world
346
partners, growth rate trends reveal an
347
increasing role for BRICS economies (i.e.
348
Brazil, Russia, India, China, South Africa),
349
for goods both entering to and exiting from
350
the ENCs. Differences across the sub-regions
351
reflect, clearly, the heterogeneous
composi-352
tion of the ENCs group (Figure 1). For each F1
353
single ENCs sub-region, trade destinations
354
(origins) are distinguished in ‘intra’ (i.e.
355
trade with the other ENCs sub-regions), ‘rest
356
of intra’ (i.e. trade within the particular
357
ENCs sub-region) and ‘world’. ‘World’ is
fur-358
ther distinguished in the EU 15, the EU 12,
359
the BRICS, the US and the ‘rest of the world
360
(RoW) countries’.
361
Geographic analysis proves the erosion of
362
the EU shares in ENCs’ trade. While in 1995,
363
the EU 15 was the most important partner
364
for the Eastern ENCs, starting from year
365
2000, the BRICS started their path to
366
become their main export and import
part-367
ner. The southern ENCs have always referred
368
to the EU 15 countries as their main export
369
and import partner. Starting from year 2005,
370
the BRICS are gaining position, particularly
371
for imports. In the Middle East ENCs, the
372
erosion of the EU 15 position has to be
373
coupled with the increasing role of the RoW
374
countries; looking at imports, the BRICS are,
375
also, gaining shares. Concerning Israel, there
376
is no reverse of position in the last 15 years:
377
the US and the RoW countries have
rein-378
forced their position; the EU 15 is still the
379
most important source but (together with
380
the US) it is losing its role in favour of the
381
BRICS and the RoW countries.
382
The geographical trade structure of
383
neighbouring countries, by type of product –
384
the increasing role of exchanges of
inter-385
mediates is one chief characteristic of the
386
globalisation wave over the last thirty years.
387
In fact, the relative weight of intermediates
388
in total exports of low-middle income
coun-389
tries has been increasing (moving from 30%
390
to 40% over the period 1995–2008; WTO
391
2010). Since the type of goods exchanged is
392
393 that trade has to promote stable and
sustain-394 able growth (Hidalgo et al. 2007), the analysis
395 distinguishes trade flows by type of product.
396 In particular, the Broad Economic Categories
397 (BEC; World Bank n.d.)4classification allows
398 for distinguishing final and intermediates
399 goods, and within the former group,
con-400 sumption, capital and primary goods.5 The
401 geographical composition of exports and
402 imports (Figure
F2 2) for the ENCs’ group
pro-403 vides, indeed, valuable insight. Changes in
404 time are reported for consumption (C),
capi-405 tal (K), and primary (P) final products as 406 well as for parts and components (PD) and 407 processed (T) intermediate products.
408 In 1995, the EU was the most important
409 export destination for all types of products.
410 In 2010, however, the situation has changed
411 substantially. The most extreme case is the
412 Eastern ENCs sub-region: the EU has lost its
413 position and the BRICS have become the
414 principal destination and origin. The Eastern
415
ENCs shifted to the emerging economies
416
their exports of consumption, capital and
417
intermediate products, while the EU remains
418
the main destination for their primary
prod-419
ucts (fuel commodities, in particular). When
420
looking at imports, shares are more balanced
421
between the EU 15 and the BRICS. The
ero-422
sion of the EU position, though slower, is
423
still present and it embraces, also, primary
424
products. Similar is the case for the Middle
425
East ENCs, where trade for all product types,
426
except for primary goods, has moved to the
427
RoW countries. The EU 15 still maintain a
428
prominent position in sourcing capital goods
429
and parts and components. The Southern
430
ENCs are the ones where the EU 15 still
431
plays an important role in both exports and
432
imports. The EU 15 relative presence has
433
been anyhow reducing in time. The BRICS
434
still do not have a role. The EU 15 is an
435
important source of demand for
consump-436
tion, primary goods and parts and
Sources: BACI Database (n.d.), authors’ elaboration.
437 accessories, while it is quite important in 438 offering parts and accessories. In Israel, the
439 US holds and reinforces its position as best 440 partner, where the EU follows (their distance 441 is increasing though). During the last years
442 of the analysis, the BRICS starts to play a 443 role, particularly in Israeli exports. All in all,
444 the importance of the EU in the ENCs’ trade 445 has witnessed strong erosion in time, mostly
446 in favour of the BRICS economies.
447 The aforementioned facts open several ques-448 tions about the role of EU trade policy and
449 the ENCs’ trade structure: How EU trade pol-450 icy intervenes in reducing the role of borders
451 and distance? Trade policy has an important 452 role in shaping the economic space between
453 trade partners. The EU chose to follow the 454 road of bilateralism (and not the one of multi-455 lateralism) in respect to its relation with the
456 ENCs. What does this mean for the ENCs? 457 How different are the ENCs between
them-458 selves and, notably, with respect to the EU?
459
The use of indicators which measure the
460
degree of similarity of trade may explain why
461
there is not much trade between the ENCs
462
and the EU. The limited role of each single
463
ENC can be attributed to the fragmented
464
role of their production structure.
465
How diversified are trade structures of the
466
ENCs with respect to sectors and destination? If
467
the ENCs trade different types of product in
dif-468
ferent origins/destinations, the evaluation of
469
the nature and the quality of their trade
rela-470
tionships may help to evaluate, also, the possible
471
evolution of their trade relation with the EU.
472
The answers to the aforementioned
ques-473
tions are going to shed light on the reasons
474
why the ENCs lose their role as EU trading
475
partners. The first two explanations raise the
476
point of the fragmentation of the ENCs area.
477
The third one relates to the weaknesses
gen-478
erated by the low level of diversification in
479
the goods which are exported from the
480
neighbouring area of the EU.
Sources: BACI Database (n.d.), authors’ elaboration.
481 THE DETERMINANTS OF TRADE
482 ACTIVITY AMONG THE EU AND ITS
483 NEIGHBOURING COUNTRIES
484 Is the EU trade policy keeping the
485 neighbouring countries too distant? – in its
486 basic form, the gravity model assumes that
487 only distance and economic size matter in
488 bilateral trade (Tinbergen 1962). Looking at 489 the EU, it could be interesting to analyse 490 how the EU trade policy can contribute to
491 increase/decrease the distance with its
neigh-492 bours (the ENCs). The EU follows the road
493 of bilateralism in respect to its relation with
494 the ENCs. The main reason for this is its
495 objective to deepen the substance of trade 496 agreements, enhancing more comprehensive
497 trade relations with its neighbours, and, thus,
498 bringing its neighbours gradually closer to
499 the Single Market. Of course, the (recent)
500 emphasis by the EU towards bilateral
agree-501 ments, rather than multilateral ones, brings 502 both positive and negative elements
(Liargo-503 vas 2013). In particular, bilateral agreements
504 seem easier to conclude, can cover more
505 areas, take note of any geopolitical
considera-506 tions and offer a strong leverage for domestic
507 reform. In contrast, bilateral agreements cre-508 ate discrimination, are not able to solve sys-509 temic issues and may complicate the trade
510 environment.
511 In contrast to the rigid Copenhagen crite-512 ria that characterised the EU (eastwards) 513 enlargement policy, the EU started to pursue
514 FTAs, bilaterally with targeted economies.
515 For the EU, FTAs represent a subway to
516 implement Deep and Comprehensive Free
517 Trade Agreements (DCFTAs) with its
neigh-518 bouring countries (Liargovas 2013; Pinna, 519 2013). DCFTAs, involving tailor-made
agree-520 ments and conditions, go beyond tariff
521 reductions to cover, more extensively,
regula-522 tory issues such as investment protection,
523 public procurement and competition policy.
524 In other words, DCFTAs are, basically, FTAs 525 with serious one-way conditionalities related
526 to progress required on political and
institu-527 tional issues on behalf of the ENCs. Such
528 conditionalities represent a ‘carrot and stick’
529 tactic that considers mandatory acquis
530 communautaire compliance as a precondition
531
for trade negotiations (and agreements)
532
(Wesselink & Boschma 2012; Petrakos et al.
533
2013). The political upheaval in the ENP
534
South and the slow reforms in the ENP East
535
(Blockmans & van Vooren 2013), provide
536
strong proof that the goals of the ENP
537
undertaking (i.e. prosperity, stability and
538
security at the EU external borders) have,
539
still, a long way ahead. This mirrors to the
540
(s)low progress of the DCFTAs, with an
541
impact on the trade component of the ENP.
542
Without getting into a discussion about
543
the existing non-tariff barriers to trade (see
544
Sklenkova 2012), the level of tariff barriers –
545
probably, the most important condition for
546
the success of a FTA – is enough to provide
547
a strong indication about the progress of the
548
DCFTAs between the EU and the ENCs
549
(Dreyer 2012). Yet, in 2010, the EU imposes
550
relatively high (simple) average tariffs to
551
trade with the ENCs,6 on both agricultural
552
and manufacturing goods, especially on the
553
former. The reluctance of the EU to remove
554
its tariff barriers to trade with the ENCs leads
555
to deadlock as it raises major hurdles for the
556
ENCs to export, to the EU market, the
prod-557
ucts on which they mainly specialise. This is
558
so as the EU attempts to create
‘neighbour-559
hood Europeanisation’ conditions with
coun-560
tries that, on aggregate, form an area which
561
is sensitive in both economic (i.e. low welfare
562
level) and demographic (i.e. high presence
563
of rural population) terms (Petrakos et al.
564
2013).7
565
Are the neighbouring countries too different
566
in their trade structures? – having observed
567
the geographical orientation of the ENCs’
568
trade and the catalytic influence of the EU
569
trade policy, it is important to discuss trade
570
asymmetries and dependencies between the
571
EU and the ENCs along with differences
572
across their trade structure. For this purpose,
573
the analysis utilises the UNCTAD
classifica-574
tion (UNCTAD 1996), which classifies
575
commodities into non-fuel primary
commod-576
ities, fuel primary commodities, labour and
577
resource-intensive commodities, low-skill,
578
medium-skill and high-skill capital-intensive
579
commodities. Looking at the sectoral shares
580
of the ENCs exports to the EU (Figure3), it F3
581
582 Azerbaijan, Belarus, Egypt, Georgia, Libya
583 and Syria) export mainly (or even, in many
584 cases, almost exclusively) fuel primary
com-585 modities (i.e. petroleum and natural gas).
586 Moreover, many ENCs (i.e. Lebanon,
Mol-587 dova, Morocco and Tunisia) export, mainly, 588 labour-intensive and resource-based com-589 modities. Only a few countries export mainly
590 low-skill capital-intensive commodities (i.e.
591 Armenia and Ukraine) and high-skill
capital-592 intensive commodities (i.e. Israel and
Jor-593 dan). Overall, the ENCs present an
unbal-594 anced sectoral allocation of exports to the
595 EU. Especially countries such as Algeria, 596 Azerbaijan, Libya and Syria, which export 597 mainly fuel primary commodities, exhibit
sec-598 toral shares that surpass even the level of
599 85%.8 The asymmetry that characterises the
600 EU-ENCs trade relations has its explanation
601 on the revealed comparative advantage
602 (RCA)9of the ENCs against the EU. Indeed,
603 all ENCs exhibit a RCA, against the EU, in
604
non-fuel primary commodities and/or in fuel
605
primary commodities (Petrakos et al. 2013).
606
The sector of fuel primary commodities, in
607
particular, is a key-sector for the EU-ENCs
608
trade relations, given that the EU is a major
609
energy importer (Ratner et al. 2013).
610
It is evident that the ENCs have developed
611
an inter-industry type of trade relations with
612
the EU.10 The persistency of the
inter-613
industry type of trade relations between the
614
EU and the ENCs has its explanation on the
615
diachronic evolution of the sectoral shares of
616
the corresponding trade activity. Indeed, the
617
sectoral composition of exports flows from
618
the ENP countries to the EU remains, more
619
or less, unchanged (i.e. high levels of positive
620
correlation) over time (Figure4). The rather F4
621
low changes in the sectoral composition of
622
the ENCs’ exports to the EU provide strong
623
indication that the ENCs, in their great
624
majority, have not (successfully)
imple-625
mented export-led growth strategies towards
Sources: BACI Database (n.d.), UNCTAD (), authors’ elaboration. Figure 3. ENCs’ exports sectoral shares (%) to the EU, years 2000 and 2010.
626 the diversification (expansion) of their
627 exports bases (Havlik et al. 2012; Boschma
628 and Capone, 2013; Petrakos et al. 2013).
629 Thus, the ENCs are in weak position to
pene-630 trate into the EU markets: on the one hand
631 they are unable (with the exceptions of Israel 632 and Jordan) to compete with their EU
coun-633 terparts in the markets for capital-intensive
634 products and on the other hand they face
635 the tariff (and non-tariff) barriers imposed
636 on behalf of the EU on imports of
labour-637 intensive and resource-intensive products
638 due to the conditionalities related to the 639 DCFTAs. This means that especially the 640 ENCs that do not exhibit RCA in the sector
641 of fuel primary commodities are ‘urged’ to
642 find new markets to export their products.
643 How diversified are the neighbouring
644 countries’ trade structures? – slight trade
645 between the ENCs and the EU could also be
646 explained by the level of diversification in
647 ENCs trade structures. Export diversification
648 is variously defined as the change in the 649 composition of a country’s existing export
650 product mix or export destination (Ali et al.
651 1991), or as the spread of production over
652 many sectors (Berthelemy & Chauvin 2000).
653
There are well known (political and
eco-654
nomic) risks (Collier 2003) in concentrating
655
exports in a few primary commodities; it
656
exposes a country to the negative effects of
657
unfavourable characteristics of world demand
658
and to the negative supply-side features of
659
these primary products. Evaluating the level
660
of sectorial concentration/diversification,
661
using the Herfindahl index,11 it becomes
evi-662
dent that, in terms of exports, the vast
major-663
ity of the ENCs exhibit, in 2010, higher levels
664
of concentration either in the EU market or
665
in the BRICS market, comparing to the
666
world market (Table2). The same stands for T2
667
imports, even though the differences are, in
668
general, smaller. Overall, imports are more
669
diversified than exports in all markets under
670
consideration.
671
The point that can be made here is quite
672
intuitive: if a country concentrates its flows in
673
few destinations and, on top of this, only
674
some sectors are considered, the vulnerability
675
of the whole trading system increases.
Provid-676
ing a brief analysis of the best export and
677
import partner for each ENC, looking at
678
both the world and the EU market, may
679
deepen the aforementioned point (see also,
680
Pinna 2013). In particular, looking at
Sources: BACI Database (n.d.), authors’ elaboration.
681 exports,12a good number of ENCs, especially 682 the Southern ones (i.e. Algeria, Egypt, Libya
683 and Syria), mainly export in their main
desti-684 nation fuel primary commodities. The
685 respective share matters for about 80 per 686 cent. The eastern ENCs mainly export
687 machinery or agricultural products. Middle
688 East ENCs and Israel have no predominant
689 sector; it depends on the destination. In
gen-690
eral, at the world level, even when the first
691
destination does not have a big share, in
692
seven out of 15 ENCs, the first exporting
sec-693
tor accounts for more than 50 per cent of
694
total exports in the country. When
concen-695
trating in the EU market, in eight out of 15
696
ENCs, the best exporting industry accounts
697
for more than 80 per cent of total exports.
698
Apparently, when such a sectorial
Table 2. Sectorial diversification (Herfindahl Index) in terms of exports and imports, years 1995 and 2010.
Exports Imports
1995 1995
World market EU market BRICS market World market EU market BRICS market
Algeria 0.47 0.57 0.26 0.07 0.07 0.08 Armenia 0.19 0.28 0.77 0.17 0.12 0.24 Azerbaijan 0.19 0.21 0.84 0.14 0.13 0.25 Belarus 0.13 0.13 0.12 0.05 0.05 0.12 Egypt 0.14 0.18 0.35 0.06 0.07 0.06 Georgia 0.34 0.14 0.19 0.17 0.17 0.26 Israel 0.10 0.06 0.09 0.06 0.06 0.08 Jordan 0.13 0.12 0.47 0.04 0.06 0.08 Lebanon 0.06 0.05 0.15 0.03 0.04 0.08 Libya 0.63 0.68 0.72 0.06 0.07 0.22 Moldova 0.13 0.16 0.23 0.05 0.05 0.17 Morocco 0.11 0.14 0.67 0.04 0.06 0.08 Syria 0.42 0.55 0.57 0.07 0.09 0.07 Tunisia 0.18 0.24 0.90 0.05 0.07 0.07 Ukraine 0.10 0.07 0.49 0.04 0.04 0.09 2010 2010
World market EU market BRICS market World market EU market BRICS market
Algeria 0.56 0.65 0.46 0.07 0.07 0.08 Armenia 0.12 0.22 0.21 0.03 0.06 0.06 Azerbaijan 0.80 0.95 0.35 0.05 0.09 0.05 Belarus 0.11 0.40 0.09 0.10 0.10 0.23 Egypt 0.07 0.12 0.17 0.05 0.07 0.05 Georgia 0.08 0.14 0.12 0.05 0.09 0.06 Israel 0.09 0.06 0.12 0.04 0.06 0.05 Jordan 0.08 0.11 0.54 0.04 0.08 0.05 Lebanon 0.07 0.17 0.83 0.05 0.07 0.04 Libya 0.79 0.82 0.97 0.06 0.09 0.05 Moldova 0.07 0.09 0.09 0.04 0.05 0.09 Morocco 0.09 0.11 0.33 0.04 0.05 0.06 Syria 0.27 0.76 0.15 0.05 0.08 0.05 Tunisia 0.09 0.12 0.36 0.05 0.06 0.08 Ukraine 0.08 0.08 0.07 0.06 0.05 0.17
699 concentration is recorded in the destination
700 where exports are higher, the presence of
701 export differentiation in other destinations 702 has a smaller weight. Moving to imports,13
703 machinery and textile products predominate.
704 The corresponding percentages are not so 705 high, comparing to exports, verifying that
706 imports are more diversified than exports.
707 CONCLUSIONS AND POLICY
708 RECOMMENDATIONS
709 The gradual dismantling of economic
bor-710 ders between the EU and the ENCs allows
711 for the expansion of the EU-ENCs trade 712 activity. Yet, despite the fact that the
EU-713 ENCs trade activity is growing over time,
714 there are a couple of findings that generate 715 concerns about its progress. The first finding 716 is that the vast majority of the ENCs do not
717 play a key role in EU trade, despite their
718 proximity. The role of ENCs in EU trade is 719 weak, and not predominant in the global
720 scene. However, aggregating the ENCs as a
721 single economic space, things change. ENCs 722 gain a key role in international trade,
becom-723 ing one of the most important EU partners,
724 in both exports and imports terms. Such an 725 exercise indicates that the neighbouring area 726 of the EU suffers the presence of many
(eco-727 nomic) borders. The second finding is that
728 the EU loses, over time, its relative position 729 in the ENCs’ trade activity. In contrast, the
730 corresponding shares of the BRICS,
espe-731 cially and the RoW countries are increasing. 732 Such a trend must be alarming for the EU
733 since the BRICS may, also, increase their
734 political influence in the ENCs’ area.
735 The trends that characterise trade activity
736 between the EU and the ENCs may attribute
737 to the EU trade policy and to the ENCs’ 738 trade structures. The DCFTAs among the EU
739 and the ENCs do not seem to provide a solid
740 stimulus in the process of ‘neighbourhood 741 Europeanisation’. In particular, the
reluc-742 tance on behalf of the EU to remove its tariff
743 barriers, especially the ones imposed on
agri-744 cultural products, does not favour trade crea-745 tion conditions, raising major hurdles for the
746 ENCs to export, to the EU market, the
prod-747 ucts on which they, mainly, specialise. The
748
EU might examine the possibility that
man-749
datory acquis communautaire compliance
750
related to political requirements should not
751
be a precondition for the progress of the
752
FTAs with the ENCs. Of course, besides the
753
EU external trade policy, the ENCs trade
754
structures have, also, an impact on the
EU-755
ENCs trade activity. By and large, the ENCs,
756
presenting high degree of geographical and
757
sectorial concentration, especially in exports,
758
are locked-in an inter-industry type of trade
759
integration with their more advanced EU
760
counterparts. This type of trade relations is,
761
mostly, the outcome of the inability of the
762
ENCs to diversify and expand their export
763
bases, implementing export-led growth
strat-764
egies. Even though, for the moment, it
pro-765
vides the only feasible route for the conduct
766
of trade activity with the EU, it is doubtful
767
whether such a type of trade integration can
768
narrow the welfare gap between the ENCs
769
and the EU.
770
The study of the EU-ENCs trade activity
771
reveals that, in relative terms, the latter is not
772
intensified over time, within the ENP
frame-773
work. The trends recorded cast doubts on
774
the mainstream win-win models of trade and
775
provide support to alternative theories
relat-776
ing trade outcomes on structural and
devel-777
opment gaps, initial conditions, market size,
778
scale effects and geographical coordinates.
779
There is a lot of potential, however, for the
780
increase of the EU-ENCs trade activity. Yet,
781
there is one condition: EU policy-makers
782
need to abandon the idea that the ENCs can
783
be integrated to the EU economic space
784
without altering the basic model of
integra-785
tion and without incurring any costs for
786
anyone.
787
Conducting a detailed descriptive analysis,
788
the paper contributes to the understanding
789
of the nature and the quality of trade activity
790
between the EU and the ENCs and indicates
791
that there is a lot of potential for expansion.
792
The analysis, though descriptive, provides
793
clear-cut evidence on some characteristics of
794
the exchanges between the EU and the
795
ENCs. In fact, the availability of detailed
796
information on the type of product helps to
797
investigate on whether trade integration has
798
increased following the implementation of
799
800 the objective of the ENP was defined in
801 generic terms both for the EU and the ENCs.
802 Trade integration was never a clearly-defined 803 objective. Even though the role of economic
804 relations is pivotal within the ENP framework,
805 when moving to the several country-based
806 agreements, contradicting priorities and 807 objectives define the limited scope of the
808 ENP to act as an anchor for economic
devel-809 opment in the EU’s external periphery. 810 The results provided in the present paper,
811 pointing out the strong dependence on some
812 sensitive products (mostly, the energy sector) 813 and, overall, the wide asymmetry in the content
814 of the exchanges, better revealed when
compar-815 ing alternative to the EU destinations for
prod-816 ucts made nearby Europe, need, definitely, 817 further investigation. For example, it is
interest-818 ing to evaluate whether also the activity of EU
819 firms outside but near the EU borders is quite
820 low if compared with alternative foreign mar-821 kets. In a context of stronger ties burst by the
822 globalisation wave of last couple of decades and
823 the involvement of countries in wider and
824 wider regional agreements, this descriptive evi-825 dence calls for further research on the links
826 between capital movements from the EU to its
827 neighbours as an engine for trade integration. 828 Also, a further research step is to estimate the 829 actual impact of the determinants of the
EU-830 ENCs trade activity, with the use of
sophisti-831 cated techniques on regional development of 832 receiving countries. The present paper provides
833 the stepping stone to this end.
834 Notes
835 1. BACI is a detailed international trade database,
836 which includes more than 200 countries and
837 provides values and quantities of trade at the
6-838 digit level of the first Harmonised System (HS)
839 classification. See
http://www.cepii.fr/anglais-840 graph/bdd/baci.htm for details.
841 2. For the needs of the study, the ENCs were
clas-842 sified in three sub-regions: Eastern ENCs
843 (Armenia, Azerbaijan, Belarus, Georgia,
Mol-844 dova and Ukraine); Southern ENCs (Algeria,
845 Egypt, Libya, Morocco and Tunisia); and
Mid-846 dle East ENCs (Jordan, Lebanon and Syria).
847 Israel is considered to be an outlier as it enjoys
848 a level of economic performance significantly
849 higher even than the corresponding level of
850
many EU countries. Due to lack of data,
Pales-851
tine is not included in the analysis.
852
3. These are the countries acceded (to the EU)
853
in the years 2004 and 2007. Croatia (acceded
854
to the EU in 2013) is not included in the
855
analysis.
856
4. See http://unstats.un.org/unsd/cr/registry/
857
regcst.asp?Cl510 for details. The BACI
data-858
base contains information on the classification
859
of products according to BEC.
860
5. Capital goods are machinery and equipment
861
that is used for producing other goods and
862
industrial transport equipment, while primary
863
goods are raw materials and resources used in
864
the productive process.
865
6. See http://stat.wto.org/TariffProfile/WSDB
866
TariffPFReporter.aspx?Language5E for details.
867
7. To better understand the EU-ENCs case, a
par-868
allelism with the US-Mexico case can be made
869
(see Hanson 1996). Mexico is for the US its
sec-870
ond export destination and its third import
ori-871
gin. The US-Mexico case has many similarities
872
to the EU-ENCs case. The GDP of the US is 13
873
times higher than Mexican GDP; the EU GDP
874
is 13.5 times higher than the GDP of the ENCs.
875
The population of the US is 2.71 times larger
876
than the Mexican; the EU population is about
877
1.78 times larger than the population of the
878
ENCs. US manufactured products enjoy duty
879
free import benefits under the North American
880
Free Trade Agreement (NAFTA) giving the US
881
businesses a quality versus cost advantage over
882
other foreign manufacturers. In fact, as of 2008,
883
all tariffs and quotas were eliminated on US
884
exports to Mexico (and Canada) under NAFTA.
885
The NAFTA created the world’s largest free
886
trade area, which, in year 2010, links 454
mil-887
lion people producing over $17.2 trillion worth
888
of goods and services. The NAFTA provides
cov-889
erage to services with the exception of aviation
890
transport, maritime and basic
telecommunica-891
tions. The agreement also provides intellectual
892
property rights protection in a variety of areas
893
including patent, trademark and copyrighted
894
material. Additionally, the US investors are
895
guaranteed equal treatment to domestic
invest-896
ors in Mexico (and Canada). The dismantling
897
of trade barriers and the opening of markets
898
has led to economic growth and rising
prosper-899
ity in all three countries.
900
8. Looking at the ENCs imports, it is revealed
901
902 medium-skill capital- intensive commodities.
903 Moreover, it can be observed that all ENCs
904 mainly import, from the EU, products other
905 than the ones that mainly export (to the EU).
906 9. RCA against a partner country (or the world)
907 refers to the proportion of the country under
con-908 sideration exports’ in a specific sector divided by
909 the proportion of a partner country (or world)
910 exports’ in the same specific sector (Balassa 1965).
911 10. Inter-industry trade means that more trade
912 occurs between sectors rather than within
sec-913 tors (Grubel & Lloyd 1971).
914 11. The Herfindahl index is a measure of
concen-915 tration/diversification and is calculated, in
par-916 ticular, by squaring the share of each sector in
917 the total trade activity and then summing the
918 resulting numbers (Hirschman 1964). It takes
919 values in interval [0, 1]. Values close to 0
indi-920 cate high levels of diversification.
921 12. Actual data are available upon request.
922 13. See the previous endnote.
923 REFERENCES
924 AGO, T., I. ISONO& T. TABUCHI(2006), Locational
925 Disadvantage of the Hub. Annals of Regional
Sci-926 ence 40, pp. 819–848.
927 ALI, R., J. ALWANG & P.B. SIEGEL(1991), Is Export
928 Diversification the Best Way to Achieve Export Growth
929 and Stability? A Look at Three African Countries.
930 World Bank Working Paper 729.
931 AMABLE, B. (2000), International Specialisation
932 and Growth. Structural Change and Economic
933 Dynamics 11, pp. 413–431.
934 BACI DATABASE (n.d.), Available at <http://www.
935 cepii.fr/anglaisgraph/bdd/baci.htm> Accessed
936 1 February 2012.
937 BALASSA, B. (1961), The Theory of Economic
Integra-938 tion. Homewood, IL: R. D. Irwin.
939 BALASSA, B. (1965), Trade Liberalization and
940 Revealed Comparative Advantage. The Manchester
941 School 33, pp. 99–123.
942 BERTHELEMY, J.–C. & S. CHAUVIN(2000), Structural
943 Changes in Asia and Growth Prospects after the
Cri-944 sis. CEPII Working Paper 00–09.
945 BLOCKMANS, S. & B. VAN VOOREN (2013),
946
AQ1 Editorial. CEPS European Neighbourhood Watch:
947 Thinking ahead for Europe 90.
948 BOSCHMA, R. & G. CAPONE(2013), Mind your Step:
949 The Heterogeneous Effect of Relatedness on the
Diver-950
sification Process in EU and ENP Countries.
951
SEARCH Working Paper 2/09.
952
BROWNING, C.S. & P. JOENNIEMI (2008),
Geostrat-953
egies of the European Neighbourhood Policy.
954
European Journal of International Relations 14, pp.
955
519–551.
956
BRU¨ LHART, M. & R. ELLIOTT (1998), Adjustment
957
to the European Single Market: Inferences from
958
Intra-industry Trade Patterns. Journal of Economic
959
Studies 25, pp. 225–247.
960
BURKE, J.D. (1973), The Effects of Economic
Inte-961
gration on the Geographic Concentration of
962
Trade: A Case Study. Tijdschrift voor Economische
963
en Sociale Geografie 64, pp. 258–269.
964
COE, D.T. & E. HELPMAN (1995), International
965
R&D Spillovers. European Economic Review 39, pp.
966
859–887.
967
COE, D.T., E. HELPMAN& A. HOFFMAISTER(1997),
968
North–-South R&D Spillovers. Economic Journal
969
107, pp. 134–149.
970
COLLIER, P. (2003), Primary Commodity
Depend-971
ence and Africa’s Future. In: B. Pleskovic & N.
972
Stern, eds., Annual Proceedings of the World Bank
973
Conference on Development Economics. pp. 139–162.
974
New York: World Bank and Oxford University
975
Press.
976
CONKLING, E.C. & J.E. MCCONNELL (1973), A
Co-977
operative Approach to Problems of Trade and
978
Development: The Central American
Experi-979
ence. Tijdschrift voor Economische en Sociale
Geogra-980
fie 64, pp. 363–377.
981
DEVEREUX, M.B. & B.J. LAPHAM(1994), The
stabil-982
ity of economic integration and endogenous
983
growth. Quarterly Journal of Economics 109, pp.
984
299–305.
985
DREYER, I. (2012),Trade Policy in the EU’s Neigh- AQ2
986
bourhood: Ways Forward for the Deep and
987
Comprehensive Free Trade Agreements. Notre
988
Europe Study & Research 90.
989
EATON, J. & S. KORTUM(2001), Trade in Capital
990
Goods. European Economic Review 45, pp.
991
1195–1235.
992
EMERSON, M. (2004), European Neighbourhood Policy:
993
Strategy or Placebo? CEPS Working Document
994
215.
995
EUROSTAT (n.d.), COMEXT statistical regime 4.
996 Available at <http://trade.ec.europa.eu/doclib/ 997 docs/2006/september/tradoc_122530.xls>. 998 Accessed 1 February 2013. 999
EVENETT, S.J. & W. KELLER (2002), On Theories
1000
Explaining the Success of the Gravity Equation.
1001
1002 GANDOLFO, G. (2014), International Trade Theory
1003 and Policy. Berlin: Springer.
1004 GAWRICH, A., I. MELNYKOVSKA & R. SCHWEICKERT
1005 (2010), Neighbourhood Europeanization
1006 through ENP: The Case of Ukraine. Journal of
1007 Common Market Studies 48, pp. 1209–1235.
1008 GROSSMAN, G. & E. HELPMAN (1991), Trade,
1009 Knowledge Spillovers and Growth. European
Eco-1010 nomic Review 35, pp. 517–526.
1011 GRUBEL, H.G. & P.J. LLOYD(1971), The Empirical
1012 Measurement of Intra-industry Trade. Economic
1013 Record 47, pp. 494–517.
1014 HANSON, G.H. (1996), Integration and the
Loca-1015 tion of Activities: Economic Integration,
Intrain-1016 dustry Trade, and Frontier Regions. European
1017 Economic Review 40, pp. 941–949.
1018 HAVLIK, P., V. ASTROV, M. HOLZNER, G. HUNYA, I.
1019 MARA, S. RICHTER, R. STO¨ LLINGER& H. VIDOVIC
1020 (2012), European Neighbourhood – Challenges and
1021 Opportunities for EU Competitiveness. WIIW
1022 Research Report 382.
1023 HECKSCHER, E. (1919), The Effects of Foreign
1024 Trade on the Distribution of Income. Ekonomisk
1025 Tidskrift 21, pp. 497–512.
1026 HIDALGO, C.A., B. KLINGER, A.L. BARA` BASI & R.
1027 HAUSMANN (2007), The Product Space
Condi-1028 tions the Development of Nations. Science 317,
1029 pp. 482–487.
1030 HIRSCHMAN, A. O. (1964), The Paternity of an
1031 Index. American Economic Review 54, p. 761.
AQ3
1032 HUMMELS, D., J. ISHII & K.-M. YI (2001), The
1033 Nature and Growth of Vertical Specialization in
1034 World Trade. Journal of International Economics
1035 54, pp. 75–96.
1036 KOOPMANN, G. & M. WILHELM (2010), EU Trade
1037 Policy in the Age of Bilateralism. Intereconomics
1038 45, pp. 305–312.
1039 KRUEGER, A.O. (1978), Foreign Trade Regimes and
1040 Economic Development: Liberalization Attempts and
1041 Consequences. Cambridge MA.: Ballinger for the
1042 NBER.
1043 LEAMER, E.E. & J. LEVINSOHN(1995), International Trade
1044 Theory: The Evidence. NBER Working Paper 4940.
1045 LIARGOVAS, P. (2013), EU Trade Policies towards
1046 Neighbouring Countries. SEARCH Working Paper
1047 2/01.
1048 MONASTIRIOTIS, V., G. PETRAKOS, D. KALLIORAS, B.
1049 DJURDJEV, D. ARSENOVIC & V. DRAGISEVIC
1050 (2010), Serbia’s Integration with the EU: Analysis of
1051 the Impact on Vojvodina. Report submitted to the
1052 Vojvodina Centre for Strategic Economic
Stud-1053 ies (Vojvodina–CESS).
1054
MYINT, H. (1958), The Classical Theory of
Interna-1055
tional Trade and the Underdeveloped
Coun-1056
tries. Economic Journal 68, pp. 317–337.
1057
OHLIN, B. (1933), Interregional and International
1058
Trade. Cambridge MA: Harvard University Press.
1059
PETRAKOS, G., D. KALLIORAS & P. ARTELARIS(2013),
1060
The Geography of Trade Relations between the EU and
1061
the ENP Countries: Emerging Patterns and Policy
Rec-1062
ommendations. SEARCH Working Paper 2/07.
1063
PINNA, A.M. (2013), Is the EU the Best Trade Partner
1064
for its Neighbours? SEARCH Working Paper 2/02.
1065
PINNA, A.M., V. LICIO & R. BRAU (2015),
1066 AQ4
Broadening or Jumping? An Analysis of the First
1067
Export Market of EU Firms. Environment and
1068
Planning C: Government and Policy, forthcoming.
1069
POON, J. & K. PANDIT (1996), The Geographic
1070
Structure of Cross-national Trade Flows and
1071
Region States. Regional Studies. 30, pp. 273–285.
1072
RATNER, M., P. BELKIN, J. NICHOL& S. WOEHREL
1073
(2013), Europe’s Energy Security: Options and
1074
Challenges to Natural Gas Supply
Diversifica-1075
tion. CRS Report for Congress.
1076
RICARDO, D. (1817), On the Principles of Political
1077
Economy and Taxation. London: John Murray.
1078
RIVERA-BATIZ, L. A. & D. XIE (1993), Integration
1079
among Unequals. Regional Science and Urban
Eco-1080
nomics 23, pp. 337–354.
1081
SAMUELSON, P. A. (1948), International Trade and
1082
the Equalization of Factor Prices. Economic
Jour-1083
nal 58, pp. 163–184.
1084
SKLENKOVA`, V. (2012), Integration Potential of the
1085
European Neighbourhood Policy. Slovak Journal
1086
of Political Sciences 12, pp. 21–41.
1087
SMITH, A. (1776), An Inquiry into the Nature and
1088
Causes of the Wealth of Nations. London: Strahan
1089
and Cadell.
1090
TIEBOUT, C M. (1956), Exports and Regional
Eco-1091
nomic Growth. Journal of Political Economy 64,
1092
pp. 160–164.
1093
TINBERGEN, J. (1962), Shaping the World Economy.
1094
New York: The Twentieth Century Fund.
1095
UNCTAD(1996), Trade and Development Report 1996.
1096
New York: UN.
1097
VENABLES, A.J. (2003), Winners and Losers from
1098
Regional Integration Agreements. Economic
Jour-1099
nal 113, pp. 747–761.
1100
VENABLES, A.J. and N. LIMA˜ O(2002), Geographical
1101
Disadvantage: a Heckscher–Ohlin–von Th€unen
1102
Model of International Specialization. Journal of
1103
International Economics 58, pp. 239–263.
1104
WEINHOLD, D. & J.E. RAUCH (1999), Openness,
1105
1106 Developed Countries. Canadian Journal of
Eco-1107 nomics 32, pp. 1009–1027.
1108 WESSELINK, E. & R. BOSCHMA (2012), Overview of
1109 the European Neighbourhood Policy: Its History,
Struc-1110 ture and Implemented Policy Measures. SEARCH
1111 Working Paper 1/04.
1112 WOOLCOCK, S. (2010), EU Trade and Investment
1113 Policymaking after the Lisbon Treaty.
Intereco-1114 nomics 45, pp. 22–25.
1115
WORLD BANK (n.d.), BEC Classification. Available
1116
at <http://unstats.un.org/unsd/cr/registry/
1117
regcst.asp?Cl510>. Accessed 1 February 2013).
1118
WTO (2010), World Trade Report 2010. Geneva:
1119
WTO.
1120
YOUNG, A. (1991), Learning by Doing and the
1121
Dynamics Effects of International Trade.
Quar-1122
AUTHOR QUERY FORM
Dear Author,During the preparation of your manuscript for publication, the questions listed below have arisen. Please attend to these matters and return this form with your proof.
Many thanks for your assistance.
Query References
Query Remarks
AQ1 BLOCKMANS, S. & B. VAN VOOREN (2013), - please provide full publishing details.
AQ2 DREYER, I. (2012), - please provide page numbers.
AQ3 HIRSCHMAN, A. O. (1964), - please confirm this is a one page article.
AQ4 PINNA, A.M., V. LICIO & R. BRAU (2015), - if in print please provide volume and page numbers. Or doi number.
AQ5 Please confirm that given names (red) and surnames/family names (green) have been identified correctly.
