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ISSN 2067-3310, E-ISSN 2067-7669 

Vol. 17, No. 2 (2023), pp. 137-141 

 

137 

 

INTERNATIONAL TRADE POLICIES AND MARKETS 

 

E. QOSE, R. DIBRA 

 

Enea Qose, Rezart Dibra 

University College of Business, Albania 
1 https://orcid.org/0009-0001-5990-486X, E-mail: eqose@kub.edu.al  
2 https://orcid.org/0000-0003-3684-6633  

 

Abstract: In this paper, is presented an overview of the evolution of international trade, 

emphasizing its role in enabling the international division of labor and a brief examination 

between Albania and Western Balkan countries foreign trade. The development of foreign trade 

is intrinsically linked to liberalization, which, in turn, fosters connectivity and mutual economic 

interdependence among nations. The performance exhibited in both exports and imports plays an 

important role in fostering sustainable development within the country's economy. Active 

engagement in these initiatives broadens Albania economy specialization possibilities but, 

simultaneously, necessitates a commitment to enhancing competitiveness. This development has 

been shaped by economic, social, political, and cultural factors, with significant advancements 

in recent decades due to industrialization, advanced transportation, globalization, and the 

emergence of multinational corporations. Trade indicators for each country serve as a reflection 

of economic development and mutual benefit. The international markets of foreign countries 

serve as platforms for both generating additional income through exports and fulfilling the 

domestic economy's requirements through imports. 

Keywords: International trade, exports, imports, etc. 

 

INTRODUCTION 

Society's development is significantly bolstered by the institution of the social division of 

labor, which initiates within the framework of the family unit and progressively extends into 

colonial and state structures, ultimately culminating in the contemporary globalized landscape. 

Central to this societal evolution is the practice of trade, serving as the primary conduit not only 

for interpersonal communication but also for the exchange of goods and commodities among 

individuals. This exchange, governed by the mechanisms commonly referred to as markets, plays 

a pivotal role in facilitating economic interactions. 

As human communities expanded and states emerged, a compelling need arose for the 

exchange of products and services between these entities. Consequently, novel mechanisms for 

facilitating trade on an international scale came into existence.  

The division of labor, marked by the specialization in the production of specific goods on an 

international scale, engenders connectivity and mutual economic interdependence among 

nations. The transition to international trade required gradual development over centuries, 

ultimately reaching an elevated state in recent decades. It has promoted greater interdependence 

between countries as well as integration and cooperation between various nationalities and 

https://orcid.org/0009-0001-5990-486X
mailto:eqose@kub.edu.al
https://orcid.org/0000-0003-3684-6633


INTERNATIONAL TRADE POLICIES AND MARKETS 

 

138 

 

business organizations. Recognizing the importance of international trade for a country's 

development is essential. A nation that successfully promotes exports over imports tends to 

exhibit a higher economic standard and an improved per capita income. Conversely, countries 

with an import-heavy trade balance often face economic challenges and diminished living 

standards. 

The research methodology integrated both the analytical method, focusing on a detailed 

examination of recent and prior literature relevant to the subject, and the comparative method, 

which enabled comparisons to be made as needed. 

 

Policies and factors affecting international trade 

Trade costs  are frequently regarded as a restraining factor in the advancement of global 

trade( Anderson & Eric van Wincoop, 2004). These costs encompass all the expenses involved in 

facilitating the movement of goods to their final destination, encompassing not only the marginal 

costs of producing the goods themselves. Within the view of this definition, trade costs has 

various components, which consist of distance-related costs, trade policies, transportation 

expenses, communication costs, procedural expenditures, and infrastructure outlays.  

Geographical distance has been overlooked in traditional growth theories, focusing more 

on national characteristics and technological progress. However, proximity and neighboring 

countries significantly impact economic activities (Carrère & Schiff, 2003). Nations farther from 

economic hubs may face developmental challenges. Distance affects production, income (trade, 

investment, technology), directly raising transportation costs and creating trade barriers 

(Berthelon & Freund, 2004). Proximity to global markets enhances resource utilization and 

economic opportunities, emphasizing the importance of geographical location in shaping 

economic development. 

Trade policy is a set of legal decisions that directly influence a country's imports and 

exports of goods and services (Motta & Onida, 1997). These policies come in various forms, 

with the most prevalent being customs duties or taxes levied on imported goods and import 

quotas that impose quantitative restrictions on specific products (Kim, 2010) . Restrictive trade 

policies are prevalent globally, occasionally concealed or nuanced. One example of the intricate 

dynamics of international trade discussions is the ongoing pressure from the U.S. government on 

Japan to limit the import of Japanese automobiles into the country. 

A tariff is essentially a tax, or duty, levied on a commodity as it crosses national borders 

(Balassa, 1965). Import tariffs, which are taxes imposed on imported goods, are the most 

common form of tariffs (Kostecki & Tymowski, 1985). Less frequently encountered are export 

tariffs, imposed on goods destined for foreign markets. Developing countries, such as Ghana for 

cocoa exports and OPEC13 for oil exports, sometimes employ export tariffs to bolster revenue or 

intentionally create global shortages, thereby raising the price of their exported products. 

 



Enea QOSE, Rezart DIBRA 

 

139 

 

ALBANIA'S FOREIGN TRADE 

Foreign trade holds a significant position within the overall economic landscape, 

particularly in the foreign sector. This aspect is of vital importance for smaller economies, such 

as Albania. In recent years, Albania's foreign trade has undergone substantial changes, marked 

by a shift toward liberalization, leading to alterations in its principal indicators. Despite the 

global economic crisis, the Albanian economy managed to maintain stability in its 

macroeconomic indicators. 

The performance exhibited in both exports and imports plays a vital role in fostering 

sustainable development within the country's economy. Additionally, it influences the trade 

balance, essential for addressing global competition. The growth rate of exports serves as a 

crucial data, indicating the stability and sustainability of the economy and its competence in 

international markets. However, this indicator is significantly influenced by the international 

economic environment. As a result, even though it is a useful indicator, its validity is strongly 

dependent on external factors. 

Additionally, the countries strong trade relationships, remittances, and banking sector ties 

with Greece and Italy expose it to the consequences of debt crises and sluggish growth in the 

euro area. These external factors contribute to Albania's economic vulnerabilities and call for 

prudent management to navigate these complexities effectively. 

 

International trade in goods of Albania for the period 2010-2023  

Trade in goods within the Balkan region has shown significant improvement. In the 10th 

month of 2022, Albania's trade with the five neighboring countries accounted for 10% of its total 

trade, up from 6.5% in 2010 (Instat, 2022). Notably, Albania has transitioned to a trade surplus 

between 2018 and October 2022, except in the case of Serbia. Albanian exports have taken 

precedence over imports in Kosovo, North Macedonia, Montenegro, and Bosnia-Herzegovina. 

However, with Serbia, the second-largest trading partner, the trade deficit has continued to 

expand. 

Challenges persist as businesses contend that trade procedures have not experienced 

substantial simplification. It's important to recognize that long-term competitiveness may be at 

risk if support for the agriculture sector is not prioritized. 

Accurate foreign trade statistics is important for the Albanian economy, influencing economic 

policies and enabling in-depth analysis of market developments for various goods. This data 

provides valuable insights into trade dynamics and helps guide decision-making in the realm of 

international trade. As illustrated in Figure 1, which depicts the dynamics of trade among 

Western Balkan countries and Albania. 

 

 

 

 

 



INTERNATIONAL TRADE POLICIES AND MARKETS 

 

140 

 

Figure 1. Trade among Western Balkan countries and Albania 

 

 

 

 

 

 

 

 

 

 

Source: Revista Monitor (2022). 

 

From 2018 through the end of October 2022, Albania has consistently achieved a trade 

surplus with the five Western Balkan countries, except for Serbia. This trend underscores that 

Albania's exports have been expanding at a faster pace than its imports. As illustrated in Figure 

2,  which show the weight of Albania's total trade with each of the Western Balkan countries.  

 

Figure 2. Weight of Albania's total trade with each of the Western Balkan countries 

 
Trade with Serbia and Kosovo experienced the most significant growth, while with the 

other neighboring countries, the increases were more moderate. A closer examination of the data 

reveals that trade with Serbia was notably bolstered by annual increases in imports of beverages, 

alcohol, dairy products, and live animals (Instat,2022). This insight sheds light on the specific 

drivers of trade dynamics between Albania and these Western Balkan nations. 

 

CONCLUSSIONS 

Initiatives aiming at liberalizing and facilitating trade on a regional and global scale have 

been effortlessly incorporated into Albania's economy. Participating actively in these projects 

increases Albania's economic specialization opportunities while also requiring a commitment to 

31%

22%

35%

4%
8%

Serbia North Macedonia Kosovo Bosnia&Hercegovina Montenegro



Enea QOSE, Rezart DIBRA 

 

141 

 

improving competitiveness. Each nation's trade indicators show how economically developed 

and mutually beneficial each nation is. Today's market facilitates the exchange of products, 

ideas, concepts, and financial assets by embodying a complex web of relationships that have 

been established within certain temporal and physical frameworks. It's important to remember 

that the development of the market depends on imported goods and services providing clear 

benefits over those made in the country.  

Government size is another variable positively related to trade, implying that the higher 

the performance in fiscal freedom and government spending, the more bilateral trade increases. 

Fiscal freedom is a direct measure of the extent to which the government allows individuals and 

businesses to keep and manage their income and wealth. A government can impose fiscal 

burdens on economic activity through taxation or by creating public debt which is then repaid 

through taxation. This means that the better the government performs in this index, the more 

bilateral trade increases. Also, excessive government spending carries a risk for commercial 

activity because an increase in public debt imposes high taxes on businesses. So the higher this 

variable is evaluated, the more inclined we are to evaluate commercial activity. Market openness 

is also a variable that positively helps bilateral trade. This means that the removal of tariff and 

non-tariff barriers would help intensify bilateral trade. In conclusion, international trade has been 

critical to the development of the world economy and civilization. Over time, a variety of 

political, social and economic factors have influenced its evolution; in the modern age, 

globalization has been the primary driver. Since trade balances have a significant impact on a 

nation's economic growth, they remain important metrics. 

 

REFERENCES 

1. Anderson, James, E., and Eric van Wincoop. 2004. "Trade Costs." Journal of Economic 

Literature, 42 (3): 691-751. 

2. Balassa, B. (1965). Tariff protection in industrial countries: an evaluation. Journal of 

Political Economy, 73(6), 573-594. 

3. Berthelon, M., and Freund, C. [2004]. “On the Conservation of Distance in International 

Trade”, World Bank Policy Research Working Paper No. 3293, Washington dc. 

4. Carrère, C. and Schiff, M. [2003], “On the Geography of Trade: Distance is Alive and 

Well”, World Bank Policy Research Working Paper No. 3206, Washington dc. 

5. INSTAT,2022. Foreign Trade in Goods.Tirane, Albania. 

https://www.instat.gov.al/en/themes/international-trade/international-trade-in-

goods/#tab3 [September,2023]. 

6. Kim, J. (2010). Recent trends in export restrictions. OECD Trade Policy Working Papers, 

No. 101, OECD Publishing. doi: 10.1787/5kmbjx63sl27-en  

7. Kostecki, M. M., & Tymowski, M. J. (1985). Customs duties versus other import charges 

in the developing countries. J. World Trade L., 19, 269. 

8. Motta, M., & Onida, F. (1997). Trade policy and competition policy. Giornale degli 

economisti e annali di economia, 67-97. 

https://www.instat.gov.al/en/themes/international-trade/international-trade-in-goods/#tab3
https://www.instat.gov.al/en/themes/international-trade/international-trade-in-goods/#tab3

