The paper focuses on the bilateral trade between Western Balkans countries and the EU and enfaces on agreements, regularity of the trade, scope and analysis of the trade flow. It also explains which are the Western Balkans countries, economical characteristics, contractual connection with the EU. It is consisted of three parts. In first part is explained the definition of the Western Balkan countries, out bilateral trade exchange between the EU and Western Balkans as a common region. Second part analyses agreements between the EU and Western Balkans countries regarding trade and EU perspective. Finally, third part focuses on the key indicators and trade balance of each country of the region with the EU.
2. WESTERN BALKANS IN GENERAL
Western Balkans is a region in Europe which includes Albania and states of Former Yugoslavia without Slovenia. Those countries are Croatia, Bosnia and Herzegovina, Montenegro, Serbia, Kosovo (as defined as UNMIK 1244), Republic of Macedonia and Albania. The surface of this region is approximately 265.000 square kilometers and total population within is 24 million inhabitants. Historical background of those states is that all of them had socialistically government. Albania was self-isolated state and under iron curtain after Second World War. It was also a member of Warsaw pact until Sino-Soviet split (worsening relations between Soviet Union and PR China). On the other hand, Yugoslavia had unique socialist model in the world called “self-management”, which had limited openness to the western countries. All countries had turnout to capitalist system in the nineties, with high inflation, high rate of corruption, suffering economies and higher unemployment rate. After wars in Yugoslavia were established five new countries: Slovenia, Bosnia and Herzegovina, Republic of Macedonia and Federal Republic of Yugoslavia. Republic of Macedonia had a name dispute of Greece (which is part of European Union) and has provisional name of FYROM in official EU documents. FR Yugoslavia was transformed in 2003 into State Union of Serbia and Montenegro. Montenegro left this union in 2006 and Republic of Serbia became formal successor of the State Union. Kosovo declared unilaterally independence in 2008, and the EU officially sees it as a separate economic region. Candidate statuses for accession in the EU have Croatia and Republic of Macedonia, while other countries are considered as potential candidates. All those countries are members of CEFTA.
3. ECONOMIC INDICATORS IN GENERAL
According to International Monetary Fund rapport of 2008, GDP per capita in those states is varying between 1.167,00€ in Kosovo UNMIK and 10.375,00€ in Croatia. Highest level is below EU 15, but higher than in Romania and Bulgaria. Analyses show that this region has need for further economic and social cohesion with the EU. In 2003 it was predicted that the EU enlargement towards Western Balkans countries would not be significant, in terms of economic scale, as the nominal GDP and the GDP per capita are at relatively low levels. (World Bank (World Development Indicators)) The region has made strong progress, outpacing Central Europe in economic growth with an average GDP increase of more than 5% in 2005. The markedly strong economic development is expected to continue in the next several years. Inflation has largely been kept under control, and is expected to decline further in the immediate future. The region’s improving risk profile and economic outlook are also validated by the international credit ratings. As unemployment is still high, sustainable economic growth and job creation are the major challenges the region faces.
4. AGREEMENTS BETWEEN EU AND THE WESTERN BALKANS
4.1 AGREEMENTS OF BILATERAL TRADE BEFORE STABILIZATION AND ASSOCIATION PROCESS Before the start of the stabilization and association process, and subsequent sign of stabilization and association agreements between the EU on one...