Using a gravity model, we estimate the magnitude of potential trade flows between Ireland and the five CEEC countries currently negotiating accession to the EU. We find that Irish exports were already close to their "normal" level in 1994, but that imports from the CEECs were still only half of their "normal" size. The value of estimated "normal" trade corresponds to 0.8 percent of Irish GNP. The actual share in 1994 was 0.5 percent. EU enlargement would raise Ireland-CEEC trade to 1.2 percent of GNP. The short-term scope for trade expansion therefore appears to be modest. Stronger potential for trade growth emerges in the "long-term" scenario, which assumes partial income convergence of the EU and the CEECs. According to our upper-limit estimate in the convergence scenario, the value of Irish trade with the CEECs could reach 7.7 percent of Irish GNP in 2020.
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Paper provided by Trinity College Dublin, Department of Economics in its series Economics Technical Papers with number
9815.
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Find related papers by JEL classification: F14 - International Economics - - Trade - - - Country and Industry Studies of Trade F15 - International Economics - - Trade - - - Economic Integration F17 - International Economics - - Trade - - - Trade Forecasting and Simulation C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
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