Hungary’s agricultural trade with the European Union during the nineties

Fertõ, Imre

The objective of this study was to use the new version of CMS model to evaluate Hungarian agro export to the European Union in the period between 1991 and 2000. The liberalisation of commerce due to the Association Treaty with the EU did not lead to a dynamic growth of Hungarian agro exports to the EU markets, despite expectations to the contrary. Agro exports have actually declined in whichever periods we examine. Factors both increasing and decreasing the performance of Hungarian agro exports were operational. According to our findings the growth of agricultural exports to the EU was brought about mainly by a general increase in EU imports of foodstuffs. Our agro exports were primarily concentrated to products, whose import demands grew the least compared to EU average. The CMS model shows that the general competitiveness of Hungarian agro export deteriorated significantly compared with other exporters into the EU. The specific competitiveness has however improved for several products, such as cereals, alcoholic beverages, oilseeds, wood and cork. The weight of these produces in Hungarian agro exports has increased from 18% to 30%. However, factors stimulating the growth of exports could not counter the effects of others bringing about a decline of exports. Sensitivity studies indicated that the outcome of CMS computations would not be altered significantly by modifications of produce categories. Tests have however confirmed that CMS estimations are exceptionally sensitive to the lengths of periods selected. Averages calculated over a period of three years were found to show better consistency than those calculated over a given year. Our tests indicated, that differences obtained from CMS modelling were not sufficient to query the results of the basic model (Tables 1-4).

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