Enhancing Regional Trade Integration in Southeast Europe

WORLD BANK WORKING PAPER NO. 185
Enhancing Regional Trade
Integration in Southeast Europe
Borko Handjiski
Robert Lucas
Philip Martin
Selen Sarisoy Guerin
THE WORLD BANKWORLD BANK WORKING PAPER NO. 185
Enhancingegionalrade
Integrationnoutheast
Europe
Borkoandjiski
Robertucas
Philipartin
Selenarisoyuerin






















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Contents
Acknowledgments.................................................................................................................vii
Foreword.................................................................................................................................viii
Acronymsndbbr eviations.................................................................................................x
Executiveummary ............................................................................................................. ....xii
Part:volutionfntraegionalrade noutheasturope:heolef
CEFTAornhancingegional radentegration...............................................1
Abstract.................2
1.ntroduction .............3
2.radeatternsn theEEegion.......................................................................................5
Patternsndtructuref Tradelowsn SEE................................................................ 7
Decompositionfntraegional rade......................................................................... 11
Intraversusnter industryrade ..................................................................................15
Qualityforeignradetatistics orhe Region.......................................................18
3.heolefradeegulations,rade elatedusinessnvironment,nd
Rulesfriginnradexpansion ndntegr ation................................................22
Technicalegulationsnd Standards............................................................................22
Tradeelatedusinessnvir onment29
Costndualityf Tradeogistics ............................................................................... 35
Rulesf Origin..................................................................................................................38
4.owreirmseactingoegional radentegrat ion?............................................41
Theasefg rokor.........................................................................................................4 1r celorMittal................................................................................................42
5.onclusionsndeco mmendations................................................................................44
Annexes.....................................................................................................................................46
Annex.A.radetructureyS roductategory in007.................................46
Annex.B.radetructureyS roductategory n008..................................48
Annex.C.etxportsoEFT A,heopndottomive HSigitroductsn
2008..............................................................................................................................50
Annex.D.escriptionf digitSategories .......................................................... 51
PartI:aborobility noutheasturope.........................................................53
Abstract.....................................................................................................................................54
6.ntroduction............................................................................................................... ...........55
7.EFTA:he etting......................................................................................................... ...56
Populationndab ororce ............................................................................................56
Economicrowthnd mployment ..............................................................................58
iii
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Migrationatt erns............................................................................................................61
Theiaspora .................................................................................................................. ...64
Migrants’ducation Levels.............................................................................................64
Migranttocksnhe CEFTAountries ........................................................................66
Irregularig ration...........................................................................................................68
Remittances................................................................................................................... .....69
8.aborobility rovisionsnreerade Agreements.................................................71
Asiaacificconomic ooperationAPEC ).................................................................71
ASEANreeraderea AFTA)...................................................................................72
Caribbeanommunit yCARICOM)..............................................................................72
Eastfricaommunity (EAC)........................................................................................74
Mercadoomunel SurMercosur) .............................................................................75
Northmericanreerade AgreementNAFTA) ...................................................... 76
Europeannion EU).......................................................................................................76
LessonsromLaborMobility ProvisionsfTAs ........................................................ 79
9.heenefitsandosts) faborobilityr ovisions...............................................83
Overallroduction androductivity 83
Theistributionfenefits ndosts .......................................................................... 84
TheransitionoUeq uirements...............................................................................86
10.mplementingobi litynEFTA ................................................................................. 87
Migrationanagement:lignmentith heU......................................................... 87
Informalconomiesndork ermits.........................................................................89
Credentialecognition,ocialecurity, therssues.................................................90
11.onclusions ............................................................................................................... .........92
PartII :Thempactfstablishingirtualustomsnionetween
Southeasturopendhe uropeannion .......................................................... 95
Abstract.....................................................................................................................................96
12.ntroduction.............................................................................................................. ..........97
13.ustomsnionersusa irtualustoms nion........................................