An Analysis of the Eu’s Investment Policy After Ceta: Effects on the Bulgarian Economy

Abstract

In this paper we analyze the changes of the EU’s investment policy provoked by the mixed trade agreements. The EU’s investment policy has turned towards attaining bilateral trade agreements. One of these “new-generation” agreements is the Comprehensive Economic and Trade Agreement (CETA). It is in a process of being ratified by the national parliaments of the EU members. This study is focused on the general characteristics of CETA and the eventual problems posed by its regulatory and wide-ranging nature. We prove that the significance of this agreement pertains not only to the economic influence, that it will have on the European and Canadian economies, but CETA is also the first trade agreement to have been negotiated with a focus on investment protection and a change in the EU’s investment policy. The current study reveals the influence arising from the conclusion of CETA on the Bulgarian economy with an emphasis on electronic industry, machinery industry and manufacturing. We estimate both – the direct and indirect effects on Bulgaria’s exports, imports, value added and employment. In order to estimate the influence, we apply the multi-regional input-output model. It is proved that CETA will have a low but positive impact on the Bulgarian economy. After constructing different scenarios of development, we prove that the influence of CETA on the Bulgarian economy will amount to 0.010% GDP. The average total employment will be increased by more than 172 jobs in Bulgaria, which in turn, relative to the labor market, represents less than 0.01% of the total employment.