Regional Trade Agreements and its Perspectives for Small Open Economies

Abstract

Studying foreign trade issues and developing the right strategy plays a key role in reviving the country's economy. Generally, the countries are involved in these processes, both at the international and regional levels. The growth of both bilateral and multilateral regional trade agreements (RTA) includes the agreements between the countries at significantly different stages of development. To reveal these differences, RTA generally contains specific and different types of provisions aiming the benefits for less developed partners. At the same time, such agreements make it possible to select a partner from a political and strategic point of view. The article discusses the importance and perspectives of regional trade through the prism of liberalization and historical experience, on Georgia - CIS example. Current trade flows with major partner countries are analyzed and the opportunities for diversity trade with other CIS trading partners are highlighted based on the intra-industry trade Index and the Finger-Kreinin Index. This analysis allows us to implement practical measures to increase the efficiency of external economic flows by identifying still unused reserves.