Unlocking Economic Integration in the Western Balkans:
Barriers, Opportunities, and the Role of the EU

This policy paper explores how to deepen economic integration within the Western Balkans in light of the European Union’s renewed push for regional cooperation and enlargement. As the EU advances its Growth Plan for the Western Balkans, strengthening intra-regional economic ties is seen as a critical step toward long-term convergence and stability.

The paper begins by examining the historical trade dependencies that continue to shape bilateral economic relationships among Western Balkan countries. It then evaluates the comparative effectiveness of the Central European Free Trade Agreement (CEFTA) versus the EU’s Stabilisation and Association Agreements (SAAs), identifying key areas where economic integration remains limited—particularly under CEFTA.

A core focus of the analysis is the range of intra-regional trade barriers that persist, from technical and regulatory obstacles to gaps in transport and logistics infrastructure. These factors continue to constrain regional trade potential and reduce competitiveness. By assessing domestic value added in exports, the paper also highlights how the region’s economies contribute to—and depend on—each other within the wider European value chain.

The study outlines four key policy priorities for the region and its partners. First, it recommends removing technical barriers to trade and improving customs procedures. Second, the paper calls for accelerated regulatory harmonisation aligned with EU standards. Third, it advocates for the liberalisation of trade in services, capital, and labour mobility. Finally, it underscores the need to invest in modern transport and cross-border logistics networks.

The paper concludes that realising the untapped potential of a more integrated Common Regional Market, backed by targeted EU investments and reforms, will be essential for driving economic growth, reducing fragmentation, and supporting a successful EU accession path for the Western Balkans.