2nd International Scientific Conference on Recent Advances in Information Technology, Tourism, Economics, Management and Agriculture – ITEMA 2018 – Graz, Austria, November 8, 2018, CONFERENCE PROCEEDINGS published by the Association of Economists and Managers of the Balkans, Belgrade, Serbia; ISBN 978-86-80194-13-4
Liberalization of the world economy is a powerful and dynamic process characterized by the abolition and/or reduction of customs restrictions, which results in static and dynamic impacts that largely determine a country’s position in global trade relations. The process of liberalization also enables technology transfer and the exchange of other forms of investments in research and development ‘outcomes’, which represent the foundations of achieving a long-term economic growth and competitiveness in the modern business environment. However, the success of countries or integrations in such conditions is largely determined by the ability to adapt and to absorb positive effects of the liberalization process.
The research problem in this paper arises from the potentially negative effects of trade liberalization, especially on the loss of competitiveness of the European economy, which was mainly established through technological progress in the previous decades. The conducted research is based on the scientific hypothesis: it is possible to determine the effects of liberalization of international trade, as well as the trade agreements that the EU concludes with third countries, on the technological progress of the European economy.
With the profound ‘insight’ into the relevant literature, the authors of this paper found that most of economic theorists have so far dealt with the effects of globalization and related processes of increased levels of technological readiness on trade liberalization. In this paper an inverse approach was used in order to investigate the effects of the removal of trade barriers on achieving the technological progress of the European economy. This approach represents the fundamental scientific contribution of the conducted research. The results showed that the EU has, in the past sixteen years, along with a few rounds of enlargements, basically doubled its international trade, achieving almost constant surplus of the foreign trade balance.
Also, together with the growth of international trade, an orientation of the European economy toward modern ‘engines of growth’, particularly based on investments in research and development and their outcomes is noticeable. In the observed period, the EU achieved increased levels of: 1) investments in R&D, 2) sales of high technology products, 3) international trade of high technology products, and 4) employment in high technology sectors. The pressure of global competition and demographic changes, which can greatly slow down economic growth and innovation activities of the European economy because of their adverse effects, are recognized as the most important challenges for the EU in the future process of trade liberalization (or de-liberalization) and the achievement of technological progress.
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