Working Paper: CEPR ID: DP1024
Authors: Andre Sapir
Abstract: Trade liberalization in Czechoslovakia, Hungary and Poland was accomplished in record time between 1989 and 1991. Sustainability became, however, a major concern in Central and Eastern Europe as the `honeymoon of trade liberalization' ended in 1991/2. The paper examines whether Europe Agreements (EAs) offer a credible mechanism to help in tying the hands of governments in favour of liberal trade policies. The focus is entirely on Hungary. The paper analyses trade policy formulation in Hungary and evaluates the actual constraint imposed by the EAs. It also examines the actual implementation of trade policies by Hungary vis--vis imports from the European Union and third countries. The paper concludes that the Hungarian experience suggests that EAs can be successful in sustaining trade liberalization in Central and Eastern Europe.
Keywords: Regional Integration; EC; Eastern Europe
JEL Codes: F13; F14; F15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| EAs (I20) | constraints on Hungary's trade policy formulation (F13) |
| EAs (I20) | credibility of trade policies (F13) |
| EAs (I20) | limit government discretion in trade policy (F13) |
| EAs + GATT obligations (F13) | constraints on tariffs and quotas on EU imports (F13) |
| EAs (I20) | maintain trade liberalization (F13) |
| EAs (I20) | introduce selective protectionist measures in agriculture (Q17) |