Trade Liberalization in Eastern European Countries and the Prospects of their Integration into the World Trading System

The paper explores the short and the long run prospects of in-tegrating the transitional economies of Eastern Europe into the world trading system. This is attempted in a quantitative framework that considers three broad, non-competing alternative scenarios that are feasible. The quantitative exercise is based on the estimation of time trends from a consistent data set for the years 1973 through 1993. The Box-Jenkins estimation and forecasting for the 10-year period, 1990-2000, confirms these trends. By a wide margin, Eastern Europe's trade with the European Union (EU) appears to be the most promising channel for bringing these countries into the mainstream of world trade.