The Effects of the European Union Enlargement on Foreign Trade of Bosnia and Herzegovina

Abstract

In times of globalization, there is a worldwide trend of creating various regional economic integrations which aim to benefit for their members. Almost all of the countries belong to or aspire to belong to a group. One of them is Bosnia and Herzegovina. As a member of CEFTA since 2006, Bosnia and Herzegovina has built its foreign trade position together with other members, with which it has had exceptionally immense level of cooperation. Bosnia and Herzegovina is committed to joining the European Union, but the accession process is facing a lot of difficulties and going slowly, so that the time of receiving full membership is completely uncertain.Croatian withdrawal from the zone of free trade for the sake of joining the European Union has had inevitably serious consequences for the rest of the countries, reflected in decreasing the volume of mutual trade, stricter standards for export and differences in tariff and non-tariff barriers relative to those that existed during the membership in the same integration. At the same time, there is a change for the new member of the European Union, which improves its trade relations with for-eign countries and confirms some theoretical standpoints on the effects of regionalintegration. Although mostly positive, these effects are not equally distributed to allmembers of the European Union.The aim of this study is to investigate the effects of the European Union enlargementon the foreign trade positions of new member states, as well as the countrieswhich are in the accession process and have a significant exchange with the EuropeanUnion. Through the analysis of indicators of the member countries, a possibledirection of foreign trade development of Bosnia and Herzegovina on its path towardsfull membership in the European Union is presented.