REGIONAL COOPERATION AND ECONOMIC INTEGRATION

REGIONAL TRADE AGREEMENTS AND REGIONAL COOPERATION
Sectors
Table 3: The GL index in 2006
Bosnia and
Herzegovina
Croatia
Macedonia
Serbia and
Montenegro
Machinery 0.72 0.51 0.24 0.24
Base metal 0.72 0.58 0.50 0.62
Textiles 0.82 0.79 0.89 0.81
Foodstuffs 0.18 0.79 0.97 0.86
Wood 0.42 0.77 0.45 0.74
Mineral 0.69 0.55 0.58 0.26
Miscellaneous manufactured
articles
0.54 0.74 0.44 0.59
Vehicles 0.19 0.24 0.13 0.15
Plastics 0.31 0.52 0.05 0.78
Chemical 0.40 0.29 0.09 0.28
Footwear 0.67 0.99 0.77 0.85
Skins, leather 0.90 1.00 0.54 0.29
Pulp of wood, paper 0.36 0.44 0.05 0.23
Stone, plaster, cement 0.12 0.52 0.40 0.21
Animal products 0.07 0.35 0.58 0.29
Precision instruments 0.27 0.05 0.08 0.12
Vegetable products 0.28 0.38 0.93 0.39
Natural or cultured pearls 0.62 0.33 - 0.62
Animal or vegetable fats and
oils
0.38 0.41 - 0.57
Arms and ammunition 0.25 - - 0.80
Source: COMEXT, own calculations.
As seen from the table, all countries have a higher level of intra-industry trade specialization
in labour-intensive sectors: textiles, base metal, wood, footwear, skins and leather. At the
same time, inter-industry trade prevails for capital intensive sectors and high technology
sectors: vehicles, chemical, precision instruments.
Intra-industry trade can be separated into horizontal and vertical types based on the unit
value of exports and imports (Algieri 2004; Reganati and Pittiglio 2005). The unit value of
exports is calculated as the value of exports divided by the quantity and the unit value of
imports as the value of imports divided by the import quantity. If RUV is within the interval
0.85- 1.15, intra-industry trade is horizontal; conversely if it is outside of this interval it is
vertical. In table 4 the first three products at the three digit level of SITC 7 concerning the
calculated RUV values are shown. At the same time, for every product its related export
share is noted.
8 SITC is the shortcut for Standard international trade classification
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