CC BY
8
Научни трудове на Съюза на учените в България-Пловдив Серия A. Обществени науки, изкуство и култура том IV, ISSN 1311-9400 (Print); ISSN 2534-9368 (On-line), 2017, Scientific works of the Union of Scientists in Bulgaria-Plovdiv, seriesA. Public sciences, art and culture, Vol. IV, ISSN 1311-9400 (Print); ISSN 2534-9368 (On-line), 2017.
FRUITS AND VEGETABLES ON CEFTA COUNTRIES' MARKET Natasa Tomic, Miroslav Crnobrnja Menthor: Vesna Mrdalj, Assistant Professor University of BanjaLuka, Faculty of Agriculture, Bosnia and Herzegovina
Abstract
The main objective of the paper is an analysis of foreign trade in fruits and vegetables between Bosnia and Herzegovina and CEFTA countries to be performed, as well as comparative advantages and the level of specialization in intra-industry trade for the above mentioned product groups and countries to be determined. In the paper data of Agency for Statistics of Bosnia and Herzegovina related to the import and export of fruits and vegetables for the period of 2008 - 2015 in accordance with Haromised System of Classification (HS) is used. To determine comparative advantages and the level of specialization in intra-industry trade for given product groups between Bosnia and Herzegovina and CEFTA, Balassa index and Grubel-Lloyd index are calculated. The analysis of foreign trade showed that Bosnia and Herzegovina had constant deficit in trade with vegetables in relation to the CEFTA, but in fruits - recorded surplus only in three years of the observed period. In the structure of fruits and vegetables import, the most important trade partners of Bosnia and Herzegovina are FYR of Macedonia (43%) and Serbia (37%). The biggest quantities of vegetables and fruits, Bosnia and Herzegovina exported to Serbia. In fruit trade, Bosnia and Herzegovina recorded higher level of specialization in intra-industry trade which is confirmed by value of GLi that is more than 50%, which is not the case with vegetables. The analysis of comparative advantages through calculation of Balassa index showed that Bosnia and Herzegovina recorded positive values for fruits trade in 2011, 2014 and 2015, but in trade with vegetables - had lack of comparative advantages. Key words: fruits, vegetables, BiH, CEFTA, comparative advantages, intra-industry trade Introduction
CEFTA agreement is one of the most important trade agreements for Bosnia and Herzegovina, which entered into force in November, 2007. CEFTA agreement was signed in 2006 in Bucharest by Albania, Bosnia and Herzegovina, Serbia, Montenegro, FYR of Macedonia, Moldova and UNMIK on behalf of Kosovo in accordance with United Nations Security Council Resolution 1244. Before the signing of CEFTA agreement, bilateral free trade agreements (32) signed within Stability Pact for South Eastern Europe existed between Balkan countries. By signing CEFTA 2006 Agreement, Bosnia and Herzegovina continued trade liberalization and made one of the significant steps in the EU integration process.
Main goals of this Agreement are related to : 1) One agreement - consolidation of existing level of trade liberalization that was achieved through bilateral agreements, 2) improvement of conditions for further investments; 3) expansion of goods and services trade; 4) abolishment of barriers and disorders in trade and relief in goods traffic; 5) insurance of fair competition conditions that impact trade and investments and opening of public procurements market; 6) appropriate protection of intellectual property according to international standards; 7) effective procedure for implementation and application of Agreement; 8) contribution to harmonized development and
Graph. 1. Trade in vegetables BH -CEFTA (mill. EUR). Graph 2. Trade in fruits BH -CEFTA (mill. EUR).
20
15
10
j j I I I J I
200
i8 2009 2010
2011 2012 2013 2014 2015
■ Export ■ Import ■ Total ■ Trade balance
Source: Agency for Statistics of Bosnia and Herzegovina.
Total volume of vegetables trade between Bosnia and Herzegovina and CEFTA countries in the period of 2008 - 2015 amounted on average of EUR 7.9 millions. Export of vegetables represented on average of EUR 0,957 million, while import - EUR 6.9 millions. Bosnia and Herzegovina recorded constantly an unfavorable trade balance in vegetables products related to CEFTA countries.
Graph 3. Structure of vegetables export according to Graph 4. Structure of vegetables import according to countries. countries.
5
0
100% 80% 60% 40% 20% 0%
2008 2009 2010 2011 2012 2013 2014 2015
Serbia
FYR Macedonia
■ Montenegro
■ UNMIK Kosovo
100% 80% 60% 40% 20% 0%
llllllll
48
49
52
62
51
47
49
2008 2009 2010 2011 2012 2013 2014 2015 Serbia ■ Montenegro ■ FYR Macedonia
Albania
I UNMIK Kosovo
Source:Calculation of authors based on data of Agency for Statistics of Bosnia and Herzegovina
Bosnia and Herzegovina traded in vegetables mostly with Serbia, Montenegro and FYR of Macedonia (graph 3 and graph 4.). An average of 54% of vegetables is exported to Serbia and about 33% - to Montenegro. In the period of 2008 - 2015 the share of vegetables import from Serbia to Bosnia and Herzegovina was on average of 52% and from FYR Macedonia - 40%. Results in fruit trade showed that Bosnia and Herzegovina recorded constant increasing of export in the period of time 2008-2015 (graph 2). The highest value of exported fruits amounted to EUR 11.8 millions in 2015. However, import amounted on average of EUR 5.3 millions and it recorded decreasing in the period from 2008 to 2011. Generally, Bosnia and Herzegovina's trade balance in fruits was favourable only in 2011, 2014 and 2015. The highest quantities of fruits are exported to Serbia (97%). Main trade partners in fruits import were Serbia with an average share of 43% and FYR of Macedonia - of 47%. In trade of vegetables the most important products were potato, tomato, onion and cabbage, and of fruit - apple, plum, grapes and berries. By applying the RCA indicator, Bosnia and Herzegovina recorded lack of comparative advantages in trade of vegetables while in trade with fruits are recorded the years with positive values of this
indicator (2011; 2014; 2015) (graph 5.). Based on values of GLi in vegetables trade between Bosnia and Herzegovina and CEFTA countries it is visible that the low level of specialization is in intra-industry trade, while in trade with fruits gradual growth of the level of specialization in intra-industry trade is recorded (graph 6.)
Graph 5. Ballasa index for fruits and vegetables. Graph 6. GLi for fruits and vegetables.
Conclusion
One of the most important foreign market for vegetables and fruit produced in Bosnia and Herzegovina are CEFTA countries, precisely markets of Serbia, FYR of Macedonia and Montenegro. Fruits rather than vegetables have more favourable trade balance. The calculated Balassa index and Grubel-Lloyd index showed that Bosnia and Herzegovina recorded comparative advantages in 2011, 2014 and 2015, as well as higher level of specialization in fruits compared to vegetables. To improve the position of Bosnia and Herzegovina's vegetables and fruits sector in relation to CEFTA countries market, it is necessary to increase intensity in vegetables and fruits production through introduction of better sorts, investments in growing systems, more supporting for construction of green houses and processing of vegetables and fruits, as well as introduction of quality standards. Introduction of quality standards should give a chance to producers to expand the export of vegetables and fruits on the market of CEFTA as well as European Union. References
1. Balassa, B. (1965): Trade Liberalization and Revealed Comparative Advantage, The Manchester School of Economic and Social Studies, Vol.32, pp.99-123.
2. Grubel, H., Lloyd P., (1978), Intra - industry Trade: The Theory and Measurement of International Trade in Differentiated Products , (London:Macmillan).
3. Mrdalj V., Ostojic A., Vasko Z., Brkovic D. (2017) Structure and determinants of intra-industry trade in agro food sector of Bosnia and Herzegovina, European Center for Science Education and Research, ICSS XII 2017, 12th International Conference on Social Sciences 19-20 May 2017,Amsterdam, Conference Proceedings, Voluem II.
4. Vollrath, T.L (1991): A Theoretical Evaluation of Alternative Trade Intensity Measures of Revealed Comparative Advantage", Weltwirtschaftliches Archiv, 130 (2): 265- 279.
5. http://www.mvteo.gov.ba/sporazumi/trgovinski/regionalni/default.aspx.
