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POLANDS FOREIGN TRADE GROWTH IN 2000-2015 AND FACTORS AFFECTING THE POST-CRISIS TRADE SLOWDOWN

B. Mucha-Leszko, M.Wojtas

Abstract

Many years of mainly European experiences in economic integration offer a vast empirical background revealing a closer link between benefits and achieved stages of integration. The largest benefits of market integration stem from: size of the internal market of the integrating area and the scale of production, increased competition, liberalization of merchandise and service trade as well as factors of production flows, fragmentation of technological processes and specialization, but also competition law and policy eliminating anti-competitive action. Poland's economic performance after the EU accession attracts a lot of interest from theoretical economists, analysts and politicians in particular due to the progress in closing the development gap towards more developed EU countries. Available analyses of rate and factors of Polish economic growth aim at evaluating the benefits of intensified trade within the common market and inflow of foreign direct investment. The goal of this paper is to assess Poland's trade dynamics and structural changes as well as to identify factors of high trade growth rates in 2000-2011 and pinpoint the causes of the slowdown in exports and imports flows in 2012-2015. The comparative analysis in the paper encompasses the following reference countries: Germany, Italy, Spain, Slovakia and Romania. This selection was based on the significance of trade linkages with Poland (in particular in the case of Germany and Slovakia), the relatable stage of economic growth or export specialization. The analysis focuses on the following indicators: exports and imports growth rates, trade balance, technological maturity of exports. Polish performance is also compared to average data for EU15, EU12 and EU27/28. The main research results: key factors of Poland's high trade growth were low labour cost, inflow of FDI and participation in German value chains whereas main reasons for the slowdown were: a decrease in FDI inflows, secular stagnation and lowering demand in Europe due to decreasing propensity to invest, protectionism and sluggish economic growth in emerging markets.

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