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Barriers to cross-border trade in intermediate goods within regional value chains in the CEFTA region

Krasniqi, Besnik, Ahmetbasić, Jasmina and Bartlett, Will ORCID: 0000-0002-6775-4339 (2019) Barriers to cross-border trade in intermediate goods within regional value chains in the CEFTA region. LSEE-CEFTA Research Papers on International Trade (1). LSEE Research on South Eastern Europe, London, UK.

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Abstract

This paper investigates the barriers to the development of regional supply chains to support the growth of regional trade in the CEFTA region. The paper first identifies the way in which regional FTAs such as CEFTA may bring about structural change and tendencies to either convergence or divergence among partner economies. Tendencies to agglomeration of benefits in countries with strong manufacturing sectors are identified. In the case of CEFTA we show that Serbia (and to some extent North Macedonia and Bosnia and Herzegovina) has used its policy of subsidising FDI in the manufacturing sector by establishing a network of special economic zones (SEZs) to gain an advantage on the regional market through boosting its capacity for the production of manufactured goods for export. We argue that the tendency towards economic divergence within CEFTA that this creates could potentially be offset by developing regional value chains to supply inputs to multinational companies based in SEZs. However, there are many barriers to the development of such cross-border regional value chains. The paper presents some qualitative research findings that reveal the range of barriers to the development of regional value chains involving SMEs. It concludes with some reflections of how policy could be focused to best reduce the barriers to regional value chains, with the aim of harnessing the opportunities offered by CEFTA to reverse the process of divergence among partner economies.

Item Type: Monograph (Working Paper)
Official URL: https://www.lse.ac.uk/business/consulting/reports/...
Additional Information: © 2019 The Authors
Divisions: European Institute
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HF Commerce
J Political Science > JN Political institutions (Europe)
Date Deposited: 01 Dec 2022 14:48
Last Modified: 19 Jun 2024 14:30
URI: http://eprints.lse.ac.uk/id/eprint/117484

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