Bilateral Economic Dynamics: Exploring the Emerging Trade Relationship Between Serbia and Israel (2021-2024)
DOI:
https://doi.org/10.57125/FEL.2025.06.25.01Keywords:
Bilateral Trade, Economic Complementarity, Serbia-Israel Relations, Trade Dynamics, Emerging Markets, U.S. interestsAbstract
In the context of geopolitical fragmentation and shifting global trade architectures, bilateral partnerships between asymmetric economies — particularly those operating outside formal multilateral frameworks — are gaining renewed strategic relevance. This study examines the evolving trade dynamics between Serbia and Israel from 2021 to 2024, with particular attention to sectoral convergence, institutional facilitation mechanisms, and macroeconomic alignment between an EU-candidate transition economy and an innovation-driven advanced economy operating without a formal free trade agreement. The research employs a mixed-methods approach combining quantitative trade data from UN Comtrade, World Bank, and national statistical offices with comparative institutional analysis of bilateral agreements and policy frameworks. Analytical instruments include Pearson correlation analysis, logistic growth modelling, and a multidimensional structural convergence index covering eight sectors. The findings reveal a rapid intensification of bilateral trade, with total trade volume growing from $107.7 million (2021) to $141.7 million (September 2024), accompanied by a 63.5% increase in Serbian exports and a 72.8% increase in imports in 2024. A persistent trade surplus of $54.9 million and export coverage exceeding 200% indicate Serbia's competitive positioning despite economic asymmetry (Israel's $509.9 billion GDP versus Serbia's $75.2 billion in 2023). Macroeconomic indicators demonstrate a strong positive correlation (r = 0.76), while bilateral export-import flows show a moderate negative correlation (r = -0.34), suggesting structurally complementary rather than substitutive trade patterns. The logistic growth model (L = 140.22; k = 0.36) projects that Serbian exports will approach saturation by 2025, signalling the need for product diversification. The structural convergence index of 0.71 confirms increasing sectoral alignment, particularly in agritech, ICT, and renewable energy. The 2020 Washington Agreement emerges as a critical institutional catalyst enabling deeper economic integration absent a formal FTA. The originality of this research lies in proposing a replicable analytical framework for asymmetric, innovation-based trade partnerships emerging without multilateral treaty foundations. The findings have direct policy implications for trade diplomacy, suggesting that targeted bilateral agreements, sectoral cooperation mechanisms, and Serbia's EU accession dynamics can foster trade-based convergence between structurally dissimilar economies, offering a transferable model for similar emerging trade corridors in the post-globalisation era.
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