Trade relations between the Republic of North Macedonia and CEFTA 2006: a comparative analysis

This paper provides a comprehensive analysis of foreign trade between the Republic of North Macedonia and other CEFTA 2006 member countries, using both the Revealed Comparative Advantage (RCA) index and the Trade Balance Index (TBI) for the period 2015–2024. The study evaluates North Macedonia’s trade performance using the Standard International Trade Classification (SITC) in bilateral trade with Albania, Bosnia and Herzegovina, Kosovo, Montenegro, Moldova, and Serbia. The findings reveal that North Macedonia consistently holds a strong comparative advantage in food and live animals, beverages and tobacco, and manufactured goods classified chiefly by material, across nearly all CEFTA partners. Particularly high RCA values were observed in trade with Moldova and Montenegro for food products, and with Albania and Kosovo for animal and vegetable oils, reflecting significant specialization. Conversely, categories such as machinery and transport equipment and miscellaneous manufactured articles remained below the RCA threshold of 1, indicating persistent comparative disadvantage. The TBI index shows trade surpluses with Kosovo, Albania, and Bosnia and Herzegovina in sectors like food, chemicals, and machinery, reflecting export strengths. In contrast, Serbia and Montenegro show persistent trade deficits, especially in food, fuels, and raw materials. Together, the RCA and TBI indicators highlight North Macedonia’s concentration in low- to medium-value-added exports, with clear export competitiveness in primary agricultural and basic industrial goods, and underscore the need for greater trade diversification.