Applying trade facilitation measures for increasing regional trade in Southeastern Europe

Abstract

In this paper we analyze the exchange of goods between the countries in Southeast Europe (SEE). By application of the gravity model of international trade, we determine the drivers of trade among 10 SEE countries: Albania, Bosnia and Hercegovina, Bulgaria, Croatia, Montenegro, Moldova, North Macedonia, Romania, Serbia and Slovenia. The focus of the research is to evaluate the influence of Trade Facilitation Indicators (TFIs) developed by OECD on intraregional trade. These indicators cover a wide range of existing border procedures determined as trade facilitation measures. The individual estimations show that, after controlling for the usual gravity model variables, seven out of the total eleven TFIs show a positive and significant impact on trade in SEE. These results point to the existence of a potential for a further boost of the intraregional trade by improving the activities related to information availability, formalities-documents, fees and charges, formalities-automation, formalities-procedures, appeal procedures and governance.