Export Performance of the Baltic States : The Effects of the Aid for Trade Initiative

As a result of the global economic crisis and the situation in the EU, as well as that of the Russian-Ukraine conflict, the Baltic exports have decreased toward these countries, while there is a slight increase in exports to other regions, mainly to Asia, meaning that Asian developing countries have gained larger share in the trade of the Baltic countries. Nevertheless, the trade performance of EU members is also influenced by several EU policies directly or indirectly. Regarding the European development policy, the Aid for Trade (AfT) initiative has a crucial role in helping developing countries to participate in international trade more effectively. It is shown that AfT assistance provided by the EU generally increases the trade volume between the EU and the recipient countries; however, there is no information on how this increase is distributed among EU member states. Consequently, this paper aims to respond to the question of how AfT influences the trade performance of the Baltic states. The research is based on an empirical investigation, by applying a gravity model. The results show that Aid for Trade provided by the EU to developing countries has no significant impact on the exports of the Baltic countries