Changes in Hungarian Agri-Food Trade Since EU accession

Abstract

In 2004, Hungary joined the European Union (EU) along with nine other countries. One of the major changes resulting from this was the transformation of these countries’ agri-food trade. The paper analyses the effects of EU accession on Hungarian primary and processed agri-food trade, using revealed symmetric comparative advantage based on the most recent available data. Results suggest that accession has enhanced the value of trade relations with the EU. Hungary’s agri-food imports have increased faster than agri-food exports, but the trade balance remains at around €1 billion, similar to its pre-accession level. Both exports and imports are highly and increasingly concentrated, by country and by product group, with exports based mainly on bulk raw materials and imports based principally on processed products. Revealed comparative advantages have weakened after accession. Indeed, the majority of products reveal a comparative disadvantage over the entire period, and this majority was larger in the post-accession period. Regarding stability, accession has radically changed the survival time of agri-food trade, in that revealed comparative advantage is shown not to be persistent. From the policy perspective, there is a clear need for radical structural changes in Hungarian agriculture and the agri-food sector. The most important long-term goal should be the production and export of higher value-added processed products based on domestic raw materials.