The Benefits Of International Free Trade For Slovenia
Introduction
Free Trade Agreements are actually considered the best way to reduce the barriers to trade between two or more countries. Governments started to use this type of agreements after World War II; this period has been characterized by a decrease in barriers, thanks to the General Agreement of Tariffs and Trade, started in 1948 as a forum for governments to negotiate lower tariffs. In 1995 it was replaced by the World Trade Organization, with the same purpose.
Several advantages derive from free trade: increase in the economic growth, decrease in the government spending, increase in the consumption and in competitiveness. All the countries that belong to the EU have the right to export and import goods freely. This means that governments may not limit quantities of imports/exports or restrict trade in any other way. Also Slovenia has used the benefit of free trade within the EU, in fact it has experienced a growth in economy since their entrance when it entered in the EU.
History
As already it was said before, in 1995 was established the World Trade Organization was established, which it guarantees free trade between member countries. Slovenia has been a member of it since the creation of when this organization was founded. In the following decades, it has joined the EU soand, with its enter, Slovenia has been able to take advantages from free trade within the Union. Slovenia also signedIt also undertook bilateral agreements with Bosnia and Herzegovina, Turkey, Latvia and Israel. The agreement with Bosnia and Herzegovina, applied in 2002, had the purpose to “promote, through the expansion of mutual trade, the harmonious development of economic relations between the Parties and thus to foster in the Parties the advance of economic activity, the improvement of living and employment conditions, and financial stability; to provide fair conditions of competition for trade between the Parties; to contribute by the removal of barriers to trade to the harmonious development and expansion of world trade. ”
The other three agreements were signed before the Slovenia’s enter in the EU and they had the same purpose than of the agreement with Bosnia and Herzegovina.
Current Status
In 2015 Slovenia exported goods for a value of $ 27,4 billions and it was estimated to beas the 62° largest exporter in the world. During the last five years Slovenia’s exports have increased at an annual rate of 2,3%. Main exports came from car and chemical industries. It exports goods in the EU, especially in Germany, Italy, Croatia, Austria and France. In 2015 Slovenia imported $27 billions, making it the 68° largest importer in the world. During the last five years the Slovenia’s imports have increased at an annual rate of 0,5%. Main import is Ppetrol represents the most important imported good. Slovenia mainly exports and imports from and to Germany, Italy and Austria.
Proposed actions and solutions
As it is demonstrated by a goodthe enormous quantity of countries that have abolished trade barriers, that free trade works well. Even though it could have some disadvantages, it also may help the collaboration between two or more countries in order to develop the globalization. Countries which do not permit yet free trade could sign make a bilateral agreement with countries that produce goods that do not exist in the countrywhat they have not. This agreement could help both countries because the importer country will get what it has not and the exporter country will receive a profit by selling it. In particular, Slovenia, an importer country of petrol, could sign undertake an agreement with countries that produce it.
Conclusion
Trade barriers have always been a problem for the circulation of goods. After the World War II several countries started to understand that free trade was useful not only for themselves, but also for the other countries, that benefit from it. Even though there are a lot of countries that use it, other countries still use trade barriers because they consider them more profitable. One of the main goals of ECOFIN is the development of international trade: and it could be achieved only if every country startsed to think itself as a member of a body and not as a unit.
Bibliography:
- The Balance: Free Trade Agreement Pros and Cons; https://www. thebalance. com/free-trade-agreement-pros-and-cons-3305845Export. gov
- Slovenia - Trade Agreements; https:https://www. export. gov/article?id=Slovenia-Trade-Agreements
- Intelligent Economist: Advantages of free trade; https://www. intelligenteconomist. com/advantages-of-free-trade/Europa. eu
- Selling within the EU; https://europa. eu/youreurope/business/sell-abroad/import-export/index_en. htm
- Free Trade Agreement between the Republic of Slovenia and Bosnia and Herzegovina;https://wits. worldbank. org/GPTAD/PDF/archive/BosniaHerzegovina-Slovenia. pdf
- Observatory of economic complexity - Slovenia;https://atlas. media. mit. edu/it/profile/country/svn/
