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Trade-Enhancing EU Enlargement and the Resurgence of East-East Trade

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  • Cecília Hornok

    ()
    (Central European University)

Abstract

This article uses the episode of EU enlargement in 2004 as a natural experiment to identify the trade effect of declining border barriers across otherwise well integrated markets. Despite the fact that traditional trade policy measures (tariffs, quantitative restrictions) were already eliminated for most industrial goods in trade between the pre-enlargement EU-15 countries and eight of the countries that entered the EU in 2004 (EU-8)2 as well as among the EU-8 themselves, EU enlargement is shown to have caused a significant trade creation. The effect was most pronounced for trade among EU-8 countries, with a magnitude of 4% to 9% in ad valorem tariff-equivalent terms. Technology-intensive industries benefitted most strongly from enlargement, and a significant anticipatory effect can also be detected for 2003. These findings highlight the importance of non-policy related border barriers to trade and may also prove useful in assessing the potential for trade integration in the current EU candidate countries.

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File URL: http://www.oenb.at/dms/oenb/Publikationen/Volkswirtschaft/Focus-on-European-Economic-Integration/2010/Focus-on-European-Economic-Integration-Q3-10/chapters/feei_2010_q3_studies_hornok_tcm16-204836.pdf
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Bibliographic Info

Article provided by Oesterreichische Nationalbank (Austrian Central Bank) in its journal Focus on European Economic Integration.

Volume (Year): (2010)
Issue (Month): 3 ()
Pages: 79-94

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Handle: RePEc:onb:oenbfi:y:2010:i:3:b:4

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Related research

Keywords: Trade costs; border effect; gravity estimation; European integration;

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References

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  1. Luca De Benedictis & Roberta De Santis & Claudio Vicarelli, 2005. "Hub-and-Spoke or else? Free trade agreements in the 'enlarged' European Union," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 2(2), pages 245-260, December.
  2. Bussière, Matthieu & Fidrmuc, Jarko & Schnatz, Bernd, 2005. "Trade integration of Central and Eastern European countries: lessons from a gravity model," Working Paper Series 0545, European Central Bank.
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Cited by:
  1. Cecília Hornok, 2011. "Gravity or Dummies? The Limits of Identification in Gravity Estimations," CeFiG Working Papers 15, Center for Firms in the Global Economy, revised 26 Sep 2011.
  2. Cecília Hornok, 2011. "Need for Speed: Is Faster Trade in the EU Trade-Creating?," wiiw Working Papers 75, The Vienna Institute for International Economic Studies, wiiw.
  3. Inmaculada Martínez-Zarzoso & Anca M. Voicu & Martina Vidovic, 2012. "CEECS integration into regional production networks. Trade effects of EU-accesion," Working Papers 2012/04, Economics Department, Universitat Jaume I, Castellón (Spain).
  4. Gábor HUNYA & Sándor RICHTER, 2011. "Mutual trade and investment of the Visegrad countries before and after their EU accession," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 2, pages 77-91, December.
  5. Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann D. & Florian Johannsen, 2012. "Foreign Aid, Exports and Development in Euromed," Ibero America Institute for Econ. Research (IAI) Discussion Papers 218, Ibero-America Institute for Economic Research.

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