Transcript 'FTA-s/CEFTA and some revealed effects, on the Albanian

"FTA-s/CEFTA and some revealed
effects, on the Albanian Economy and
Agribusiness"
Selim Belortaja
ACIT (Albanian Centre for International Trade)
Skopje, January 25, 2008
My Presentation
• Our region: accelerated process of tariff liberalisation.
Albania: deeper liberalization in Agbiz tariffs.
• Growth of trade volume but ..with important imbalances.
Ag.and ag.processing products suffering more
• Gains from trade liberalization (hub and spoke, retail
prices)
• CEFTA – 2006: cares on insufficiencies of bilateral FTA-s
• Competitiveness: a comprehensive approach for
optimizing impacts and maximizing benefits from
t.liberalization
SEE countries: a multi-path commitment to
trade liberalization efforts
• Autonomous measures
• Regional efforts/agreements
– Bilateral
– CEFTA 2006
• EU integration
• Multilateral context (WTO)
Brussels 2001:
the MoU on Trade Facilitation and Liberalization,
The regional approach gains a new momentum
Albania’s simple bound av.tariff
dynamics, 2002-2009
average tariff in %
12
10
8
6
4
2
0
2002
2003
2004
2005
2006
2007
2008
2009
Tariff liberalization: Albania and its neighbors, relatively low import tariffs
ALB
Tariffs, %
Simp. average final bound
Total
Agric
Non-Agric
B&H1
7.0
9.4
6.6
BUL
CRO
FYROM
25.6
42.4
23.0
6.4
12.0
5.5
7.2
13.4
6.3
MONT1
MOLD
ROM
EU
6.9
13.4
6.0
39.9
98.4
30.9
5.4
15.4
3.9
5.4
15.1
3.9
Simp. aver MFN applied
Total
Agric
Non-Agric
5.7
7.9
5.4
7.2
13.8
6.2
10.4
19.9
9.0
4.9
11.0
4.0
8.3
13.7
7.4
4.9
10.8
4.0
5.2
11.5
4.2
(2005)
15.9
22.9
14.8
Animal prod2
8.6
45.7
24.0
20.9
14.1
19.7
17.8
23.1
25.4
Dairy prod2
9.9
21.3
39.0
26.3
20.8
29.0
17.1
39.0
23.8
Fruit, veget, plants2
10.3
8.5
24.0
11.9
20.8
13.5
13.2
20.2
11.8
Coffee, tea2
11.7
7.8
23.9
8.8
14.7
10.0
8.1
18.0
6.5
Cereals and preperations2
7.9
13.6
26.4
12.3
17.8
7.9
10.7
22.2
25.6
Oilseeds, fats & oils
2.1
2.6
10.1
4.3
2.8
2.6
5.9
12.3
5.9
Sugar and confectionery
5.6
8.5
26.9
19.3
8.2
4.8
18.6
33.8
32.9
Beverages and tobacco
11.1
31.5
30.7
14.9
31.6
24.2
17.7
53.9
20.2
Cotton
2.0
0.0
0.0
0.0
0.0
0.0
0.0
1.8
0.0
Other agri prod
6.1
1.2
6.4
2.6
1.9
1.7
6.4
20.3
5.3
1Non-
WTO member
2Average
MFN applied
Albanian regional trade, supported
by the bilateral FTA-s
Albanian Trade Flows with the region
350,000
12.0%
10.0%
250,000
8.0%
200,000
6.0%
150,000
4.0%
100,000
2.0%
50,000
0
0.0%
2000
2001
Imports from the region
2002
Exports to the region
2003
2004
Imports as % of total imports
2005
2006
Exports as % of total exports
as % to total import/export
Import/export with the region (000 US$)
300,000
An impressive growth of regional trade
volume – but still weak import coverage
2002
total
Albanian
Exports
330,2
2006
total
2002
regional
2006
regional
790,6
12,7
64,0
Imports
1490,0 3049,7
113,3
Trade
Volume
1820,0 3840,3
126
Total trade Regional tr.
2006/2002 2006/2002
2,4 times
5,0 times
316,6
2,04
2,8
380,6
2,11
3,0
ALBANIA’s TRADE
2002
2003
2006
Fact
Tendency
Regional import coverage
(By regional exports)
11,2
11,7
20,2
weaker
Strong improvement
Total import coverage
(By total exports)
22.2
24,1
26
better
Slight improvement
Distribution of Albanian exports to the region (2006)
Serbia &
Montenegro
17%
Romania
1%
Bosnia &
Herzegovina Bulgaria
5%
7%
Croatia
4%
Macedonia
20%
Moldova
0%
Kosova
(UNMIK)
46%
Origin of Albanian regional imports (2006)
Serbia &
Montenegro
11%
Bosnia &
Herzegovina
3%
Romania
17%
Macedonia
19%
Moldova
2%
Kosova
(UNMIK)
6%
Bullgaria
31%
Croatia
11%
Albanias total exports to the region
140,000.00
thousands USD
120,000.00
100,000.00
80,000.00
60,000.00
40,000.00
20,000.00
-
2000
2001
2002
2003
2004
2005
2006
2007
Thousand
USD
Albanian export of agbiz. Products
to the region
20,000.00
18,000.00
16,000.00
14,000.00
12,000.00
10,000.00
8,000.00
6,000.00
4,000.00
2,000.00
2000
2001
2002
2003
2004
2005
2006
2007
Annual increase rates of Albania’s total
export to the region (%)
200.0%
150.0%
100.0%
50.0%
0.0%
-50.0%
2001
2002
2003
2004
2005
2006
2007
Annual increase rate of Albanian Agbiz.
Export to the region (%)
200.0%
168.7%
150.0%
100.0%
50.0%
63.9%
5.0%
10.7%
0.0%
-50.0%
-3.7%
9.6%
2001
2002
2003
2004
2005
8.6%
2006
2007
The rate of the export of Agbiz. commodities
to total export to the region (in %)
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
2000
2001
2002
2003
2004
2005
2006
2007
Albania’s total imports from the region
500,000.00
450,000.00
400,000.00
thousand
USD
350,000.00
300,000.00
250,000.00
200,000.00
150,000.00
100,000.00
50,000.00
-
2000
2001
2002
2003
2004
2005
2006
2007
Alb. Imports of Agbiz. products
from the region
140,000.00
120,000.00
Thousand
USD
100,000.00
80,000.00
60,000.00
40,000.00
20,000.00
2000
2001
2002
2003
2004
2005
2006
2007
Increasing rate of total imports to the
region 2001-2007 (%)
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
2001
2002
2003
2004
2005
2006
2007
Increase rates of agbiz. Imports
from the region
120.0%
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%
-20.0%
2001
2002
2003
2004
2005
2006
2007
The rate of the imports of Agbiz. commodities
to total imports from the region (%)
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
2000
2001
2002
2003
2004
2005
2006
2007
Is there any “visible” shift to a stronger
regional trade? (2003 to…)
The intra-regional and EU oriented trade - 2003
(The size of spheres shows the trade openness index for each country)
Trade with the regioni(% e of total
trade)
50%
Kosova
40%
Bosnia & Herzegovina
30%
Macedonia
20%
Serbia & Montenegro
10%
Moldova
Croatia
Albania
Bulgaria
0%
0%
10%
20%
30%
40%
50%
60%
-10%
Trade with EU (% of total trade)
Romania
70%
80%
90%
…2006)
70%
Macedonia
Trade to the region(% of total trade)
60%
50%
Kosovo
40%
Montenegro
Bosnia&Herzegovina
30%
Rep of Moldova
Serbia
20%
Albania
Croatia
Bulgaria
10%
Romania
0%
0%
10%
20%
30%
40%
50%
-10%
Trade to EU 25 as % of total Trade flows
60%
70%
80%
Albania’s Openness indexes, as % to GDP
2000
2001
2002
2003
2004
2005
2006
(Goods Export
+Import)/GDP
36.0
39.9
40.4
39.1
36.9
39.6
41.8
(Ex+Im+Pr.Tr) /GDP
47.6
53.1
53.2
52.8
49.8
51.2
54.8
Goods exp./GDP
6.9
7.4
7.3
7.8
7.96
8.0
8.6
Export growth rates
(%)
-7.2
19.3
8.4
35.4
34.9
9
20
(Goods +services
export +import)/GDP
59.8
63.7
66.5
65.8
62.0
64.7
66.2
(Ex+Im+S+Priv.
Transf.) /GDP
71.4
76.9
79.3
79.5
74.9
76.3
79.2
(Ex+Im+S+Private
Transfers + FDI)/GDP
75.3
82.0
82.3
82.6
79.4
80.5
83.7
Failures of bilateral FTA-s
– Mendelson: “A complicated system(‘sphagetti bowel’)…”
– World Bank (2000): “…a series of uncoordinated bilateral FTA-s,
with different coverage, preferential depth and rules of origin, are
very hard to be implemented…”
– Not in full conformity with the principals and standards of the
MoU 2001, including the trade coverage standards (90% of the
tariff lines and 90% of import value)
– A critical issue: the rules of origin, considering just the “individual
origin” from a single country
– As a result the implementation of the FTA’s “… could not lead to
the expected dynamic benefits regarding the economy of scale,
transfer of technology, etc.” (Grupe and Kuŝić, 2005)
On the other hand: The context of
Thessaloniki agenda:
• called for deeper trade relations, including the
development of closer regional trade integration.
• recalled the central role of trade policy in SAP
This calls for broad and complex facilitating and
liberalization measures, far beyond the mere
tariff liberalization
From FTA-s to CEFTA 2006 – a
“natural” and smooth process
• -consolidation of the 31 bilateral FTA-s, deeper
liberalization, abolition of quotas
• -creation of a single Regional Free Trade area
• -”modernised CEFTA”: completion with “new” dimensions,
like trade in services, measures regarding investments,
public procurement, competition and state aid, i.property,
antidumping, safeguards, non-tariff-barriers, etc.
• -from the view of EU: complementary to the Stabilization
and Association process
Trade liberalization and trade growth –
a complex casual link
A complexity of factors behind the end results:
–
–
–
–
–
–
Restoration of peace in the region
On-going reform process in each country regarding the business climate
Infrastructure development
More free movement of people
FDI / economic growth
European Integration process
and:
– FTA-s and CEFTA
The regional trade - still a potential to be explored:
– EU markets remain the most important for many SEE countries.
– Imports from the other countries are also expanding fast
Competitiveness- a key issue
GCI and Albania, 2007-08
Ranking Comparison
Report of WEF, 2007-2008
Global Competitiveness Index
Albania 2007: 109/131 (score: 3.48)
Albania 2006: e 98/122 (score: 3.56)
•
•
•
•
•
Rank 131 in “inovation”
“ 124 in “Infrastructure”
“ 117 in “goods market efficiency”
“ 114 in “Institutions”
“ 74 in “technological readiness”
122
119
107
111
88
Main concern: lowest position as compare to the region
Business Competitiveness Index:
• Albania 2007:
rank 122 out of 127 countries
• Albania 2006:
119th out of 121
GCI and its 12 pillars 2007-08
Who takes care on each issue?
Albania
GCI 2007-08 (out of 131)
Croatia
130
Bulgaria
Innovation
Institutions
Macedonia
Bosnia & Herzegovina
Business sophistication
Infrastructure
65
Market Size
Macroeconomic stability
0
Technological readiness
Health and primary education
Financial market sophistication
Labor market efficiency
Higher education and training
Market efficiency
Concluding Remarks
• The regional trade liberalization build on an complex and multi-path
process.
• Albania’s trade with the region growing faster and showing more
interest. Winners and losers
• Albania’s Agbiz regional trade, facing more difficulties to compete.
• The increased trade volume so far, mainly results from tariff
liberalization.
• Problems with the distribution of gains from tr. liberalization
(externally and internally)
• CEFTA-2006 brings a new momentum, especially in overcoming
some non-tariff shortcomings.
• Competitiveness: an approach and philosophy which deserves more
attention by governments, donors and interest groups
• Neither tariff liberalizat. nor regional trade volume, are ‘final goals’
per se. They are processes leading to sustainable development
• EU integration shall prevail, as it addresses with priority the
remained issues
THANKS FOR THE
ATTENTION
Contacts:
[email protected]
www.acit.al.org