New comparative advantages in the Central and Eastern European countries

Abstract

Central and Eastern European Countries have increased the weight of international trade on their GDP and the role of Foreign Direct Investment. Some are key final market for EU companies. Their integration, though, has been triggered by outsourcing and offshoring. Data show that their industrial structure is evolving towards new specialisation in the backward phase of the production process. Central European countries’ competitiveness in traditional clothing and fashion sectors is decreasing, while Eastern countries are improving. The comparative advantage in some advanced sectors, instead, are on the rise. This happen, mainly, in the “parts and intermediates” categories both as for import and as for export. Such division of labour suggest that Central and Eastern European countries are complementary to EU competitiveness. They contribute to keep costs under control. This may harm Italian firms’ competitiveness if the don’t follow the same practices as other companies. Finally, the Italian firms engaged in assemblying activities without own brands might be hit by such practices.