Eastern Journal of European Studies (Jun 2018)
Central European Free Trade Agreement: did the initiative prove its commitments?
Abstract
CEFTA 2006 is an important cooperation platform providing the Western Balkan countries and the Republic of Moldova with the opportunity to share experience and build functional economic relations. It aims to improve the economic development of the states through assuring a favourable environment for trade and investments. Moreover, CEFTA is viewed as a preparatory instrument for the future European integration of the states. It has been 10 years since the formation of CEFTA. Over this period, numerous economists, politicians and researchers debated on whether the initiative proved its commitments and what the impact of CEFTA on regional economic development, and in particular, on regional trade and investments is. Therefore, to reach relevant conclusions about the researched subject, the present paper is focused on quantitative data analysis involving descriptive and econometric methods. The analysis reflects the CEFTA general economic, trade and investments performances by examining the respective indicators including GDP per capita, GDP growth rate, total trade, imports/exports and net foreign direct investments inflows. Also, several inferences based on the correlation analysis of individual countries and the average CEFTA indicators in terms of per capita GDP, exports/ imports, net FDI inflows are provided. The results obtained show that the CEFTA’s primordial achievement is the de-tensioning and improvement of the political-economic evolution in the Western Balkans, followed by some trade benefits and a modest rise in the countries’ FDI performance. We have reached the conclusion that the agreement is primarily beneficial to the countries’ economic relations with their neighbours and the EU, having a favourable, yet, not determinative impact on economic development, trade and investments.
