The EU Stabilisation and Association Agreement for the Western Balkans: Between Challenges and Opportunities

Abstract The role of the European Union (EU) trade liberalisation with the four Western Balkan countres — namely Kosovo, Montenegro, Albania, and Macedonia — is overestimated, as major benefits could be expected mainly from institutional reforms rather than trade creation and economic perspective due to low economic development and a lack of comparative advantages in these countries1. The core issue to be addressed in this article is whether these firms can exploit the opportunities arising from the EU integration process. The aim of this article is to confirm the hypothesis that the Stabilization and Association Agreement (SAA) and trade agreements in the Western Balkans are not sufficient pre-conditions for successful performance and increase of exports by local firms; the main focus should be on the internal performance of firms. The paper analyses and compares the data collected by surveys conducted with local firms in Kosovo in order to measure the impact of the SAA. Finally, the article suggests that in the short and medium run the SAA could support and improve the quality of products, technical standards, and firm competitiveness as a pre-condition for better access to the EU market in the long run.