Liberalization of trade with Turkey and its impact on the textile industry of Serbia

Solving the accumulated problems of Serbian industry and economy in general and stopping the process of disindustrialization that is already in progress for so long, impose economic policy makers the urgent need to define the development strategy of export-oriented industries with the active and precisely defined industrial policy. Abandoning the previous policy of relying solely on market mechanisms assumes the identification of industries which have factors of competitiveness that can be valorize on the international market. Textile Industry of Serbia, despite the serious problems that has passed between the dissolution of the joint state, economic sanctions and the slow transition still retained recognizable export potential. Given the existing factors of competitiveness (price and availability of labor, proximity to major markets and the continuing presence of them, favorable access to markets, acceptable level of technology and organization of production), and with adequate support from the state industrial policy it can be far more important factor of economic development and solving burning problems of unemployment. The foundation of effective and precisely targeted support is a long-term development strategy of this industry. Question of prospects of textile industry is even more topical in the context of the expected start of the implementation of the Agreement on Free Trade with Turkey, one of the world's largest producer of textiles. Potentially positive and serious negative effects of the implementation of the Agreement, require the need for adequate and timely response to these challenges through the instruments of industrial policy and activities of manufacturers of textiles themselves. Creating a better institutional environment for strengthening the competitiveness of this industry assumes the use of instruments that are proposed in the text.