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Barriers to Trade in Services in the CEFTA Region

The Central European Free Trade Agreement (CEFTA) was concluded among the countries of Southeastern Europe with the aim to promote further trade integration. The agreement states the objective to 'expand trade in goods and services and foster investment by means of fair, clear, stable and predictable rules.' While recent literature on trade in the CEFTA region has focused on analyzing trade in goods, the purpose of the paper is to identify the remaining barriers to trade in services among the CEFTA countries.

Barriers to Trade in Services in the CEFTA Region examines the economic and trade importance of the service sector in CEFTA countries, and the existing barriers to trade in services between CEFTA countries, with a focus on four sectors: construction, land transport, legal and information technology (ICT) services.

The analysis shows that the export of services has a significant share in CEFTA countries. These countries have achieved considerable market openness, mostly in the context of pursuing WTO and EU accession. Nonetheless, obstacles to trade in services remain. Some, such as the movement of professional workers, are of general nature, while others are sector specific.

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In the past decade the economic performance of the Central European Free Trade Agreement (CEFTA) countries was solid, especially just before the global economic crisis, which hit most CEFTA countries hard. Expansion of trade had contributed to economic growth in most CEFTA countries even though trade, measured by the share of the export of goods and services in total output, was lower than in many of the states that joined the European Union (EU) in 2004 and 2007 (New Member States). The post-crisis agenda in the CEFTA region has focused on how to make exports a greater component of sustained growth. Although that would rely primarily on exports of goods, services could also make a significant contribution, particularly through the indirect effect of facilitating exchange of goods.

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