Economics and Rural Development, Volume 10, Number 2

Possibilities for Integration of the Eastern Partnership Countries’ Export into the EU Markets

Jolanta Rauluskeviciene, Daiva Makuteniene
Aleksandras Stulginskis University

Abstract

To implement the Eastern Partnership (EaP) framework launched in 2009, the EU seeks to bring its Eastern neighbours – Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine – closer to the European standards, promote regional relations with these countries, ensure sustainable growth of their economy, cooperate in trade area for the countries of the Eastern Partnership to become economically stronger, European countries, part of the European markets and structures. It is important for the EU that the countries neighbouring with its Eastern boarders are stable and their economies continue to develop. One of the ways to promote economic growth of a country or region is to develop its export. Geographical proximity of the markets provides the opportunity for the EaP countries to increase trade with the EU, thus creating the conditions for economic growth. The research was aimed at evaluating the possibilities for integration of the EaP countries’ export into the EU markets by identifying characteristic features of the countries’ export structure and their comparative advantages in trade with the EU. The article presents extensive analysis of export of six EaP countries, characteristic features of product specialization are identified, and comparative advantages of production by these countries and their effectiveness are identified. No similar studies have been carried out in a common context of the EaP countries till now. Export concentration (diversification), export structure similarity, the revealed comparative advantage and Lafay indices have been measured with the view towards the aim of the research. Empirical study of the export structure and comparative advantages of the EaP countries has been carried out using statistical data for the period 2005–2012 provided by Trade Map database, classification of products into product groups under the Combined Nomenclature. The results of the research have shown that current integration of the EaP countries’ export into the markets of the EU countries is not favourable enough for the countries due to irrationality of their export structure and low level of export diversification. Only Moldova’s variety of the exported products was deeper, broader and closer to the export by the EU. The results of the analysis of comparative advantages have shown that the set of product groups having comparative advantage in the export by the EaP countries to the EU is rather wide, such products have already occupied the EU markets niche, which could lead to more effective leverage of the export potential and, at the same time, create preconditions for economic growth of these countries and their export integration into the EU markets.

Keyword(s): Eastern Partnership (EaP) countries, export integration, export commodity structure, export specialization, comparative advantage


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DOI: http://dx.doi.org/10.15544/erd.2014.009

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