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Email this citationCIAO DATE: 04/04
The Role of Competitiveness for Stability in South East Europe
Kresimir Jurlin
January 2004
Abstract
The Stabilization and Association Process (SAP) was initiated by the EU for countr ies not covered by European agr eements, i.e. A lbania, Bosnia and H erzegovina, Croatia, Macedonia and Serbia and Montenegro. The pr ocess is realized through Stabilization and Association Agr eements (S AA) that the EU already concluded w ith Croatia and Macedonia, which have important implications for international tr ade and investment. The SAA s focus on respect f or democratic pr inciples and strengthening links of the countries of the region w ith the single mar ket. They fores ee the establis hment of a free trade area with the EU and set out rights and obligations in areas such as competition and state aid rules, intellectual property and rights of establis hment, which will allow the economies of the region to begin to integr ate w ith the EU. Ther efore, the SAP should be regar ded as a tool f or integration of the countries of South- Eas t Eur ope into the emerging pan-European free trade area, res ulting in removals of trade bar riers betw een all countries that ar e gaining associate membership status. I t should be regarded as a process of transfor mation of small, closed national economies to countries integrated in a wide ar ea of free movement of goods, services and investment.
This process especially includes regional cooperation. While the SAA provides for individual approaches to the EU, it is also related to regional cooperation defined as a ser ies of bilateral agr eements between the SEE countr ies that have s igned the SAA. For example, a "Memorandum of Understanding on Trade Liberalization and Facilitation" was s igned on June 27, 2001 betw een A lbania, Bosnia- Herzegovina, Bulgaria, Cr oatia, Macedonia, Romania and S erbia and Montenegro. Following the Memorandum, fr ee tr ade between the signator y countries has been realized by completing a network of fr ee tr ade agreements by 2003. These agreements provide for free trade in at least 90 % of the par ties' mutual tr ade, within a transition per iod not longer than 6 years.
How ever, while free trade within South-East Europe could remove significant constraints to intraregional trade, the main focus shall r emain on the overall process of integrating these countries in the European Union. The EU remains the main trading par tner of all the SEE countries and ther e is a lar ge potential to incr ease trade and cooperation between the two, which would also bring to overall development of thes e countries. Therefore, it is impor tant that all the SEE countr ies move f orwar d in trade liberalization also within the WTO framewor k, pr oviding for the opportunities for large scale investment, long-term cooperation and mergers and acquisitions at the regional level.
The purpose of this paper is to help identify the role of increasing competitivenes s of the S EE countries within the mentioned fr amework, in order to make them eligible for the full EU membership as soon as possible. The paper r elies on the findings of the G lobal Competitiveness Report 2003/2004 as the main tool for assessing the standing of competitiveness in SEE countries.
