Moldova EU Free Trade Agreement: What It Means for the Country`s Economy
Moldova, a landlocked country in Eastern Europe, has been undergoing significant economic and political changes over the past few decades. One of the most important milestones in this transformation was the signing of the Moldova-EU Association Agreement in 2014, which included a free trade agreement (FTA). The FTA has had a significant impact on Moldova`s economy, opening up new opportunities for growth and development.
The Moldova-EU FTA is a comprehensive agreement that covers a wide range of goods and services. It eliminates tariffs and non-tariff barriers on most goods traded between Moldova and the EU, making it easier and cheaper for Moldovan businesses to export their products to the EU. The agreement also includes provisions on intellectual property rights, competition policy, and government procurement, which help ensure a level playing field for Moldovan businesses.
Since the FTA was signed, Moldova has seen a significant increase in exports to the EU. In 2019, Moldova`s exports to the EU amounted to €1.3 billion, up from €817 million in 2013. This represents a 59% increase in just six years. The EU now accounts for around 70% of Moldova`s total exports, up from around 50% before the FTA was signed.
The FTA has also helped Moldovan businesses to diversify their exports. Before the FTA, Moldova`s exports to the EU were dominated by a few products, such as wine and textiles. However, since the agreement was signed, Moldovan businesses have been able to expand into new markets and new products. For example, Moldova is now exporting more food and agricultural products to the EU, such as fruits, vegetables, and honey. This has helped to reduce the country`s reliance on traditional exports like wine.
Another important benefit of the FTA is that it has attracted more foreign investment to Moldova. The agreement sends a strong signal to investors that Moldova is committed to free and open trade, which makes the country a more attractive destination for foreign companies. This has helped to spur economic growth and create new jobs in Moldova.
However, the FTA has also presented some challenges for Moldova. For example, some sectors of the economy, such as agriculture, have struggled to adapt to the increased competition from EU imports. This has led to some social and political tensions in the country. Moldova has also faced some difficulties in implementing the FTA, particularly in terms of regulatory reforms and administrative capacity.
Despite these challenges, the Moldova-EU FTA has been a significant success for the country. It has opened up new opportunities for Moldovan businesses and helped to spur economic growth and development. As Moldova continues to pursue closer ties with the EU, the FTA will remain an important pillar of the country`s economic and political relationship with the EU.