SEE trade liberalisation – new opportunity for B&H agrobusiness?

Abstract

PurposeThe purpose of this research is to analyze implications of SEE trade liberalisation for the B&H agribusiness sector and to provide policy recommendations for both the public and private sector.Design/methodology/approachThis study uses revealed comparative advantage (RCA) index and Grubel‐Lloyd index (GLIIT) to indicate sectors and markets where country's exports are more (or less) competitive in relation to their trading partners, present on a given destination market.FindingsB&H agrifood import, export and trade deficit are growing, but export growth rate is significantly higher, especially on SEE markets. The values of RCA and GLIIT index are indicating better overall B&H agribusiness performances at SEE market in comparison with EU 27. Findings confirm that trade liberalization opened up a window of opportunity, which is not efficiently utilized by B&H agribusiness sector.Research limitations/implicationsRCA does not provide information of how spotted advantages will evolve and overlooks impacts of public policies. The GLIIT offers no information of correlation in quality between imported and exported goods.Practical implicationsAs for the government, the main implication is the mode to improve the business environment, especially to empower institutions which have to provide services in order to meet international agreements requirements and customers' requirements.Originality/valueThere are no studies examining B&H agribusiness trade patterns, competitiveness and level of integration at SEE market which used disaggregated trade data. The outcomes could be used to craft both direct public sector policies and private business policies in order to improve sector competitiveness.

Agri-food competitiveness in South East Europe

“…More specifically, previous research on this topic focused mainly on levels of competitiveness or agriculture's economic performance in a specific SEE country (e.g. Bojnec and Ferto, 2009;Bojnec and Ferto, 2010;Lovre, 2016;Matkovski et al, 2016;Nikolić et al, 2011), without finding factors that affect agri-food competitiveness. Bojnec and Ferto (2010) compared SEE countries' agri-food trade specialization patterns of with those of the EU.…”

“…An index of RCA larger than 1 indicates that comparative advantages are present, and when the RCA value increases, so do the sector's comparative advantages. This index has been used in several studies in the literature to determine comparative advantages at the national level, for sectors, and at the commodities level (Balogh and Jambor, 2017;Bojnec and Ferto, 2017;Bojnec and Ferto, 2018;Ferto, 2008;Ignjatijević et al, 2014;Nikolić et al, 2011). An alternative measure of comparative advantages is the Lafay Index (LFI) (Lafay, 1992), which is often used in the literature at a lower level of trade data aggregation (division, commodity group or product):…”

“…Also, Matkovski et al (2017) analysed Serbia's comparative advantages for agri-food products and concluded that Serbia has comparative advantages in the export of agri-food products on the global market as well as on the EU and CEFTA markets, and they highlighted that products at a lower processing phase have the largest comparative advantages on the global market. Using RCA, Nikolić et al (2011) indicated sectors and markets in which B&H exports are competitive in relation to their trading partners and found that B&H's agri-food products have better overall performances on the SEE market in comparison to the EU market. These authors also confirmed that trade liberalization created opportunity that is not efficiently utilized by B&H's agri-food sector.…”

The foreign trade liberalization and export of agri-food products of Serbia

“…The value of this index which is between 1 and 2 indicates the satisfactory comparative advantages. A modified version of the index of comparative advantages for country (i) and section, division, or commodity group (j) is calculated in the following way (Nikolic et al 2011;Bozic and Nikolic 2013b): doi: 10.17221/345/2015-AGRICECON where: X -export; M -import, i -country; j -section, division, commodity group; t -total import/export The RCA index is calculated both for the section of agri-food products on the international market, on the market of the EU and region, and for the sections, divisions and commodity groups of agri-food products individually. For the determination of the significance of intra-industry trade of the particular section, division or commodity group in the total trade (i), between two countries (region), the Grubel-Lloyd index is used (Grubel and Lloyd 1975;Bojnec et al 2005;Nikolic et al 2011;Bozic and Nikolic 2013a):…”

Daya Saing Ekspor Cengkeh Indonesia Di Pasar Global

“…Revealed Comparative Advantage (RCA) digunakan dalam penelitian ini sebagai alat analisis untuk mengukur keunggulan komparatif suatu negara. Metode ini juga mencerminkan pola perdagangan yang didasarkan pada perbedaan antar negara secara relatif (Bojnec dan Ferto, 2014;Nikolić et al, 2011). Menurut Granabetter (2016) dan Kuldilok et al (2013), indeks RCA mudah dihitung dan banyak digunakan untuk mengukur perubahan keunggulan komparatif berbagai macam sektor dan yang utama adalah sektor pertanian.…”