The Evolution of the Foreign Trade of the Countries of the South Caucasian Region

Public Administration Academy of the Republic of Armenia, Republic of Armenia Purpose - This study examines the foreign trade dynamics of the South Caucasus countries (Armenia, Azerbaijan, Georgia) to evaluate the level of economic cooperation, the impact of global and regional integration, and the role of foreign trade in promoting economic growth and improving living standards. The study highlights the significance of the Coefficient of Comparative Advantage (CCA) in identifying optimal trading partners and enhancing foreign trade stability. Design/Methodology/Approach - The research employs historical-logical analysis, abstraction, statistical compilation, economic indicator analysis, and trend observation. Comparative advantages in foreign trade were assessed, and hypothetical unions among countries were formed based on trade patterns. Theories related to trade cooperation were tested using regional data and trends. Findings - The study reveals the complexity of trade and economic relations in the South Caucasus due to political and socio-economic factors compounded by Russia’s historical and contemporary influence. The ongoing Russian-Ukrainian conflict since 2022 has further reshaped the region’s export and import flows, emphasizing the need for strategic economic partnerships and reliance on comparative advantages in foreign trade. Research Implications - The findings contribute to understanding the challenges and opportunities in foreign trade within the South Caucasus. Policymakers can use the results to design strategies that leverage comparative advantages, enhance economic integration, and mitigate regional geopolitical challenges. The study also provides a framework to apply the CCA in regional trade analysis and decision-making.