34 products. Countries with very low tariff rates had both relatively high shares of preferential imports (e.g., Latvia, Slovakia) and low shares of these imports (e.g., Estonia). So did the countries with high simple average MFN tariff rates—Hungary with the share of 71 percent in 2003 and high tariff rates and Slovenia with the share of 82 percent (Table 15).

**Table 15:** _Share of preferential partners in imports of manufactures of EU Eastern Enlargement economies in 19902003 (in percent)_

||Industrial products|Reporting|Index,1992|Index,1996|Index,1999|Index,2003|Share|Average|Peaks|hare|
|---|---|---|---|---|---|---|---|---|---|---|
|Reporter|Average MFN|period|1990=100|1993=100|1994=100|2000=100|2003|1996-03|Year|share|
|**Bulgaria**|**9.0**|**1996-2003**|**n/a**|**n/a**|**64**|**100**|**82**|**81**|**2001**|**84**|
|Czech R.|4.7|1993-2003|n/a|n/a|97|95|79|82|1995|87|
|Estonia|0.1|1995-2003|n/a|n/a|n/a|93|68|73|1995|80|
|Hungary|9.5|1990-2003|125|102|81|96|71|76|1995|84|
|Latvia|0.8|1994-2003|n/a|n/a|126|100|86|86|2001|87|
|Lithuania|3.1|1994-2003|n/a|n/a|122|89|75|80|2001|86|
|Poland|9.6|1990-2003|119|97|78|103|82|81|1993|84|
|Romania|15.9|1990-2003|139|102|76|104|84|82|2003|84|
|Slovakia|4.6|1993-2003|n/a|n/a|101|98|85|86|1999|87|
|Slovenia|10.9|1992-2003|n/a|104|101|98|82|84|2001|84|

Notes: Manufactures defined as SITC 5+6+7+8-68 in SITC. Revision 2. Source: Data reported to UN COMTRADE database.

Third, note also that geographical proximity to the EU-15, accounting for most of preferential imports of these economies, does not offer any clues as the share of preferential imports. In fact, dispersion in the shares of preferential partners in manufactured imports of pan-European transition economies is very low, with the coefficient of variation of 0.08 for 2003 and 0.05 for the average shares in 1996-2003.

Last but not least, over 2000-03, despite zeroing of the remaining preferential rates on industrial products, the share of pan-European imports in manufactured imports of CEEC-10 mostly contracted. This share only slightly increased in Poland’s imports and Romania’s imports. Except for Romania, the share of pan-European preferential partners in manufactured imports was in 2003 below the levels recorded in earlier years (Table 16).

**Table 16:** _Imports of manufactured goods by major trading partners in 1996 and 1999-2003 (in million of US dollars and percent)_

|||Import|Value ($|million|)||Aver<br>Gro|age<br>wth|Index<br>2003||Impo|rt Share|(%)|||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|Partner|1996|1999|2000|2001|2002|2003|1996-<br>99|2000<br>-03|2000=<br>100|1996|1999|2000|2001|2002|2003|
|World|2,429|3,497|3,837|4,714|5,331|7,440|9.5|18.0|194|100|100|100|100|100|100|
|European Union (15)|1,573|2,368|2,565|3,257|3,573|4,835|10.8|17.2|188|64.7|67.7|66.8|69.1|67.0|65.0|
|CEEC (8)|141|<br>237|287|312|351|509|13.9|15.4|177|5.8|6.8|7.5|6.6|6.6|6.8|
|**EU-25**|1,714|2,605|2,852|3,568|3,925|5,343|11.0|17.0|187|70.6|74.5|74.3|75.7|73.6|71.8|
|Romania|33|<br>21|40|50|65|85|-10.9|20.8|213|1.3|0.6|1.0|1.1|1.2|1.1|
|Turkey|75|<br>131|170|229|343|557|15.0|34.5|328|3.1|3.7|4.4|4.9|6.4|7.5|
|EFTA(3)|79|75|81|84|88|111|-1.1|8.4|137|3.2|2.1|2.1|1.8|1.7|1.5|
|**TOTAL PAN-EURO**|1,900|2,832|3,143|3,933|4,420|6,097|10.5|18.0|194|78.2|81.0|81.9|83.4|82.9|81.9|
|Israel|7|<br>8|6|16|16|14|4.3|23.0|233|0.3|0.2|0.2|0.3|0.3|0.2|
|SEE(5)|17|<br>9|12|14|16|24|-14.3|20.3|200|0.7|0.3|0.3|0.3|0.3|0.3|
|**OTHER FTA**|23|17|18|29|32|39|-7.8|21.3|217|1.0|0.5|0.5|0.6|0.6|0.5|
|**TOTAL PREF.**|1,940|2,856|3,171|3,970|4,465|6,153|10.2|18.0|194|79.9|81.7|82.6|84.2|83.8|82.7|
|**ROW(NON-PREF)**|489|<br>641|667|743|866|1,287|7.0|17.9|193|20.1|18.3|17.4|15.8|16.2|17.3|

Note: Manufacturing products are defined as SITC 5+6+7+8-68 in Revision 2. Source: Derived from UN COMTRADE database as reported by Bulgaria.

Developments in geographical patterns of trade of other CEEC-9 economies provide an extra support to the conclusion that the growing reverse discrimination in imports of manufactures has not resulted in significant diversion in Bulgaria’s trade. They all point to the size of the pan-European free trade for industrial products rather than the level of MFN tariff rates on manufactured goods as explaining the absence of any significant trade diversion effect (Kaminski 2005). Consider the following: First, geographical