Evolution of Exports of the Republic of Moldova to the European Union: The Role of Trade Regimes

In 1995-2007 Moldova's foreign trade grew strongly, but very unbalanced, with imports prevailing strongly over exports. During this period the European Union became the main trading partner of the Republic of Moldova. In 2007, EU countries accounted for 50.6% of exports and 45.6% of imports of our country. As the largest economy in the world, such shares in Moldova - EU trade are almost perfectly in line with the trade gravity theory predictions. The main objective of this study is to identify the role the trade regimes granted by the EU to Moldova played in shaping exports by now. To answer this question the authors use an international trade gravity model adapted to the analytical needs and the conclusions are verified based on an alternative model.