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Trade integration is the most important element in broader, longer term integration of the countries of South Eastern Europe (SEE) into European Union. This paper reviews progress in integration by the countries in the region and the challenges that lie ahead for them and the international community. The signing of a Memorandum of Understanding(MOU) for Trade Liberalization by the SEE countries and the conclusion of Stabilization and Association Agreements between them and the European Union are the two main accomplishements of the last five years. The main challanges ahead involve the effective implementation of the trade liberalization commitments of the MOU, the alignment of trade and related policies to those of the EU and the establishment of a true Free Trade Area among countries in SEE. To meet these challenges, countries in the region need to takes steps to strengthen their institutional capacity and the EU and the international community need to provide technical and financial assistance as well as maintain and liberalize market access for SEE products.

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Constantine Michalopoulos

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