Importance of free trade agreements in Albanian

Importance of free trade agreements in Albanian legislation
Importance of free trade agreements in Albanian legislation an essential role in developing the free market economy in our country has been played by various international agreements, such as international agreements, deals with the European Union, and bilateral agreements with different countries.

Since the early ’90s, Albania and all countries in the region have continuously been involved in the reform and integration processes in the area and beyond; due to the foreign sector’s role in the development of the country’s economy, trade policy reform was an essential aspect of Albania’s economic policy framework from the beginning of the transition.

Throughout the transition period, our country’s trade regime was involved in an intensive liberalization process, which has developed in several stages. The beginnings of the transition were characterized by autonomous liberalization, which was driven by initial liberalization reforms focused on prices, foreign trade, and so on.

The chronology of trade liberalization continues, with the process of multilateral liberalization, concertized with Albania’s accession to the WTO, as well as with the intensification of regional liberalization and integration into the European Union. The high attention paid to regional liberalization and EU integration, especially after 2000, was materialized through the signing of several free trade agreements with the countries of the region and the SAA agreement with EU structures.

A limited domestic market characterizes Albania with not very strong competitive advantages. For more than ten years, Albania has been making continuous efforts to liberalize foreign trade rules to increase exports and replace imports.
Even though our country still ranks among the countries with the most limited economic opening and not significantly integrated with other economies.

In morphological terms, we have called free trade agreements, when they are trade agreements without customs tariffs or with reduced customs tariffs. They are not and can never be, in the full sense of the word free trade.
Free trade in the full sense of the concept used by Adam Smith can not be exercised in the current conditions between two countries, especially in the Balkans, when in addition to numerous obstacles and customs duties, there are many procedural obstacles administrative, legal, border, restrictions on the movement of people, etc. The region’s citizens have not yet moved freely between their countries and no more extended exercise economic activities.

However, Albania became part of the international trade system from the beginning of the economic transition, being institutionalized in the world trade system in 2000, with the membership in the WTO. At the urging of the EU, our country is involved in signing Free Trade Agreements with the countries of the region to create a Free Trade Area to include all the Southern Balkans’ nations.

The deepening of economic interdependence and the strengthening of globalization trends have intensified the debate between lawyers and economists on the link between trade openness, investment, and economic growth.
The Free Trade Agreement is a document negotiated and agreed upon between the parties with trade liberalization. Liberalization is immediate for products with clear comparative advantages and gradual for import-sensitive products. For the latter, the agreements provide an escalating reduction of customs tariffs and their elimination over the period until the creation of the free trade area.

The SAA trade measures introduce a uniform system of preferences for the countries of the region. They remain asymmetric, immediately offering improved market access to almost all products originating in the area. On the other hand, the Western Balkans’ countries agree under the contractual obligations of the SAA to gradually reduce their tariffs on imports from the EU to achieve a substantial liberalization in trade.
Regarding the developments in Albania’s foreign trade after the ’90s, we can say that the flow of imports has increased significantly due to the increase in domestic demand and the inability to meet this demand from domestic production. Although average annual export rates have been higher than imports, the trade deficit has widened from year to year. This has been the main problem in trade developments due to the consequences it brings to economic growth.

Low export levels indicate the low degree of restructuring of our economy. In the first years of transition, exports were dominated by domestic production and after 1998 (especially after 2000), we have a steady increase in exports from active processing. Trade structure is characterized by a dynamic lack in its sect oral distribution, while the geographical distribution of work has also experienced variability due to international trade developments.

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