Trade-Enhancing EU Enlargement and the Resurgence of East-East Trade
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.
Volume (Year): (2010)
Issue (Month): 3 ()
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- Luca De Benedictis & Roberta De Santis & Claudio Vicarelli, 2005.
"Hub-and-Spoke or else? Free trade agreements in the 'enlarged' European Union,"
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Cattaneo University (LIUC), vol. 2(2), pages 245-260, December.
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"Trade Integration of Central and Eastern European Countries: Lessons from a Gravity Model,"
105, Oesterreichische Nationalbank (Austrian Central Bank).
- 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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