Building competitiveness and increasing trade potential in the western balkans: Policy making in preparing for european integration

Abstract

One of the basic conditions for the European Union (EU) membership is a candidate country's ability to cope with competitive pressures of the single European market. Given that the Western Balkans economies are in the bottom tier of global competitiveness rankings, joining the EU represents a monumental task. Western Balkan economies lack dedicated institutions tasked with the creation and coordination of trade policy so that within this void, informal actors, such as foreign companies and special interests exert considerable influence. This paper explores the role of government and the private sector (e.g., chambers, individuals, oligarchs) in developing the trade framework, specifically focusing on the role of policy makers, formal and informal networks, and regional bodies in shaping the regional and national trade policy. It pays a particular attention to the regional trade integration as a framework conducive to improving competitiveness in the Western Balkans, against a broader context of compliance with the WTO multilateral trade regime. The paper highlights the challenges facing policy makers in the region in creating a stable and predictable framework for the locally operating companies, and ensuring a level playing field.