REGIONAL COOPERATION AND ECONOMIC INTEGRATION

REGIONAL TRADE AGREEMENTS AND REGIONAL COOPERATION
Speaking about trade in the region based on the data from previous years we see, that
regional trade – trade among partners in CEFTA - is relative small (Table 2).
Table 3: GDP in 2006 relative to GDP of 1989 (% – 1989=100%)
GDP index
Albania 144
Croatia 105
B&H 75
FRY Macedonia 91
Montenegro 73
Serbia 64
Source: Transition report update 2007, EBRD, p. 64
Major trade flows for all CEFTA members and for Turkey are focused on EU. Regional
integration has limited starting trade bases for enhancing open trade benefits. Trade effects
ar larger with the level of GDP. Unfortunately many of WBCs have their GDPs on low levels
often even below levels from the period of ex SFRY (Table 3). WBCs have signed a new
Central European Free Trade Agreement (CEFTA) on December 19, 2006 in Bucharest.
Data for last years regional trade developments are difficult to collect. But partial data
available show that CEFTA have yet not contributed a lot to increases of regional trade. We
may conclude that up to 2009 CEFTA was not really enhancing the level of regional trade.
The reasons among other elements are connected to the issue of rules of origin in the region
and towards the EU in the past.
All economic integrations provide free access to partner markets only for products which
actually originate from partner’s country. Origin is the “economic” nationality of goods
in international trade. There are two kinds of products in relation to their origin; nonpreferential
and preferential products.
Non-preferential origin of a product confers to the origin of products subject to all kinds
of trade (border) policy measures (such as anti-dumping measures, technical barriers,
permissions, certificate requirements, VERs, ...) or tariffs and quotas. The concept of the
rule of origin is also used for statistical purposes, for example to correctly collect data for
export and import or for balance of payments. Preferential or non- preferential provisions
in relation to rule of origin is used are used as well in cases of public tenders or origin
marking. The use of origin concept is one of “building blocks” to implement in practice
the provisions of any type of the economic integration among states. Preferential rule of
origin confers certain benefits on goods traded between particular countries – often among
counties joined in the economic integration. Entry of goods which are declared preferential
origin into the EU is possible at a reduced or zero rate of duty and eventually free of other
entry barriers too. In either case, an important element in determining the origin of goods
and their preferential or non preferential status is their proper tariff classification. In the EU
case traded goods are identified by a code number from the Combined Nomenclature (CN).
Before trying to determine their origin and specific origin status it is essential that their CN
code has been properly identified. Movement of goods within Customs unions, in fact EU is
even higher form of economic integration – it is internal market integration type – or within
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