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EU enlargement: economic implications for countries and industries

  • Arjan Lejour


  • Ruud de Mooij
  • Richard Nahuis

This paper explores the economic consequences of the enlargement of the European Union with countries from Central and Eastern Europe. We focus on integration aspects that go beyond the reduction of formal trade barriers, namely accession to the internal market and free movement of labour. The economic implications for sixteen industries in several European countries are assessed by using WorldScan, a CGE model for the world economy. The results suggest that the candidate member states will gain substantially from accession to the internal market, although some sectors in these countries will shrink. Most EU countries will experience small welfare increases. We also find that the internal market effects are large compared to the economic effects of removing formal trade barriers and migration.

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Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Document with number 11.

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Date of creation: Sep 2001
Date of revision:
Handle: RePEc:cpb:docmnt:11
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  1. Bauer, Thomas K. & Zimmermann, Klaus F., 1999. "Report No. 3: Assessment of Possible Migration Pressure and its Labour Market Impact Following EU Enlargement to Central and Eastern Europe," IZA Research Reports 3, Institute for the Study of Labor (IZA).
  2. Brenton, Paul & Gros, Daniel, 1997. "Trade Reorientation and Recovery in Transition Economies," Oxford Review of Economic Policy, Oxford University Press, vol. 13(2), pages 65-76, Summer.
  3. Fritz Breuss, 2001. "Macroeconomic Effects of EU Enlargement on Old and New Members," WIFO Monatsberichte (monthly reports), WIFO, vol. 74(11), pages 655-666, November.
  4. Keuschnigg, Christian & Kohler, Wilhelm K., 1998. "Eastern Enlargement of the EU: How much is it Worth for Austria?," CEPR Discussion Papers 1786, C.E.P.R. Discussion Papers.
  5. Richard Nahuis, 2002. "One size fits all? Accession to the internal market; an industry level assessment of EU enlargement," CPB Discussion Paper 14, CPB Netherlands Bureau for Economic Policy Analysis.
  6. Bergstrand, Jeffrey H, 1989. "The Generalized Gravity Equation, Monopolistic Competition, and the Factor-Proportions Theory in International Trade," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 143-53, February.
  7. Alan Deardorff, 1998. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," NBER Chapters, in: The Regionalization of the World Economy, pages 7-32 National Bureau of Economic Research, Inc.
  8. Paul Brenton & John Sheehy & Marc Vancauteren, 2001. "Technical Barriers to Trade in the European Union: Importance for Accession Countries," Journal of Common Market Studies, Wiley Blackwell, vol. 39(2), pages 265-284, 06.
  9. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-23, June.
  10. Richard E. Baldwin & Joseph F. Francois & Richard Portes, 1997. "The costs and benefits of eastern enlargement: the impact on the EU and central Europe," Economic Policy, CEPR;CES;MSH, vol. 12(24), pages 125-176, 04.
  11. Brown, D. & Deardorff & A. & Djankov, S. & Stern, R., 1995. "An Economic Assessment of the Integration of Czechoslovakia, Hungary and Poland into the European Union," Papers 8, American Institute for Contemporary German Studies-.
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