Albania - International trade



Albania depends on imports for most of its consumption. It was not able to produce enough exports to offset its large trade deficit of US$814 million in 1999, a huge sum for the size of the economy. This trade deficit may create serious problems for Albania in the near future. A major contribution to offsetting the deficit are money transfers from Albanians abroad, which grew from US$324 million in 1999 to US$531 million in 2000. Raw material exports are also crucial but gradually shrinking. Exports are declining, particularly in minerals, contributing only 8 percent of domestic exports in the last quarter of 1999, down from 45 percent in 1998. Re-exports of goods processed in Albania for manufacturers abroad increased mostly in textiles and footwear but also in electrical appliances, foods, and metal products. In the last quarter of 1999, they contributed 70 percent of total exports, a 29 percent increase from the last quarter of 1998. Exports by the tobacco industry were down by almost a third in 1999 from 1998, and other agricultural exports were hit by drought. The EU countries are Albania's chief trading partners, notably neighboring Italy and Greece, partly due to subcontracting for Italian and Greek manufacturers drawn by cheap local labor. Other significant trading partners include Germany, Turkey, Bulgaria, Macedonia, and the United States. Albania joined the World Trade Organization (WTO) in 2000 and is committed to trade liberalization and reducing tariffs on imports. In 1999, the EU promised Albania preferred trade status and reduced some tariffs on Albanian exports.

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