Outward Processing as an Instrument of Commercial Policy and of Entrepreneurial Strategy

Outward processing has become a much discussed issue in Austria's economic policy debates. At first the negative impact on Austria's textile and apparel industry of the EU's outward processing with East-Central Europe dominated the discussion. This problem disappeared, however, when Austria entered the EU. The increasing use of outward processing by Austria's firms to improve their price competitiveness has attracted less attention. This advantage was limited, however, by rules of origin, which rendered the export of merchandise produced in this way difficult. Again, membership in the EU removed these obstacles.