Macedonian Export Performance and Potential Gains from EU Integration

The objective of this paper is to assess Macedonian export performance as a function of the economic performances of its main trading partners in a panel context. We also evaluate the role of relative prices. In general, the results suggest that Macedonian exports are highly dependent on foreign demand, particularly on EU demand, while relative prices are insignificant. FTAs are found to increase Macedonian exports by half, but no additional gains are accrued from the CEFTA 2006 agreement. This is in accordance with the conclusion that the EU's economy has a strong effect on Macedonia; hence CEFTA 2006 countries, including Macedonia, are eager to trade with the EU instead of trading amongst themselves. In a separate section, the paper uses a qualitative approach to discuss the potential benefits for Macedonian trade from the new Lisbon Treaty and further EU integration in general