Changes in the Structure of Intra-Visegrad Trade after the Visegrad Countries’ Accession to the European Union

wiiw Statistical Report No. 5,
99 pages including 52 Tables and 81 Figures

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After the EU accession of the Visegrad countries (the Czech Republic, Hungary, Poland and Slovakia) in 2004 one of the most remarkable developments was a sudden upturn in mutual trade of this region’s countries. In 2007 the value of aggregate intra-Visegrad trade was two and a half times higher than in 2003. The rate of growth in these countries’ trade with the ‘old’ EU member states was only half as much as that. As part of a research project in search of explanation for the upturn of mutual trade, this paper addresses the questions how the structure of mutual trade of the Visegrad countries developed in the post-accession period compared to the immediate pre-accession period and the early years of transition and what directions of specialization are discernible. It is looking for explanatory factors for the differences in dynamism and commodity structure of mutual trade across periods and regions respectively, and investigates the role foreign-owned enterprises may have played in the upturn of mutual trade. The methodology applied includes traditional descriptive analysis based on SITC commodity groups; a comparison of pre-accession and post-accession developments in the composition of trade by factor inputs and skills respectively; an investigation focused on trade increments analysed by the marginal industry trade method (MIIT). Finally indicators of revealed comparative advantage (RCA) are calculated. The various trade structure indicators presented in the paper show that the EU accession has not brought about any abrupt changes in commodity patterns and revealed comparative advantages. In bilateral trade relations, apart from some exceptions, the changes observed were typically continuous and gradual, overarching the whole period 2000-2007. This is, however, no reason to claim that the EU accession played a minor role in the upturn of mutual trade in the region concerned – but the effect is not focused on the year of accession. With the date of accession approaching, the firms involved in intra-Visegrad trade may have gradually elaborated their new, geographically more diversified sales/procurement strategy. In the new strategic concepts of the main exporting firms (mostly multinationals) the Visegrad region itself is thought to have been upgraded both as a target for sales and as a host of potential cooperation partners for production.

 

Keywords: intra-regional trade, Visegrad, CEFTA, trade patterns, intra-industry trade, revealed comparative advantage, marginal intra-industry trade

JEL classification: F13, F14, F15, F23

Countries covered: Czech Republic, Hungary, Poland, Slovakia

Research Areas: International Trade, Competitiveness and FDI


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