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EU Enlargement and Beyond: A Simulation Study on EU and CIS Integration

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  • Sulamaa, Pekka
  • Widgrén, Mika

Abstract

This Paper examines the economic effects of the opening of the former Soviet Union. The analysis carried out in the Paper is two-fold. First, we simulate the impact of the eastern enlargement of the EU, and second, we analyse how deeper integration between the EU and FSU contributes to this. The analysis is carried out with FTAP computable general equilibrium model. We find that there is a trade-off between the two roads of European integration arrangements. Eastern enlargement seems, even in its very deep form, be beneficial for all EU regions without causing substantial welfare losses outside the Union. The only regions that seem to lose somewhat are NAFTA and Japan. EU-CIS integration, on the other hand, has a different impact. To be beneficial for CIS-countries, free trade between the EU and CIS countries requires improved productivity in the latter, which may be due to better institutions or increased FDI, but still the agreement is not beneficial for large parts of the EU and the rest of the world.

Suggested Citation

  • Sulamaa, Pekka & Widgrén, Mika, 2003. "EU Enlargement and Beyond: A Simulation Study on EU and CIS Integration," CEPR Discussion Papers 3768, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:3768
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    References listed on IDEAS

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    1. Hanoch, Giora, 1975. "Production and Demand Models with Direct or Indirect Implicit Additivity," Econometrica, Econometric Society, vol. 43(3), pages 395-419, May.
    2. Ricahrd 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, April.
    3. André Sapir, 2000. "Trade Regionalism in Europe: Towards an Integrated Approach," Journal of Common Market Studies, Wiley Blackwell, vol. 38(1), pages 151-162, March.
    4. Sapir, Andre, 1998. "The political economy of EC regionalism," European Economic Review, Elsevier, vol. 42(3-5), pages 717-732, May.
    5. Bhagwati, Jagdish & Greenaway, David & Panagariya, Arvind, 1998. "Trading Preferentially: Theory and Policy," Economic Journal, Royal Economic Society, vol. 108(449), pages 1128-1148, July.
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    Cited by:

    1. Babetskaia-Kukharchuk, Oxana & Maurel, Mathilde, 2004. "Russia's accession to the WTO: the potential for trade increase," Journal of Comparative Economics, Elsevier, vol. 32(4), pages 680-699, December.
    2. Libman, Alexander, 2008. "Federalism and regionalism in transition countries: A survey," MPRA Paper 29196, University Library of Munich, Germany.
    3. Bonin, John P., 2005. "Europe and Central Asia after the May 2004 EU enlargement: A brief synthesis," Economic Systems, Elsevier, vol. 29(1), pages 1-5, March.
    4. Pekka Sulamaa & Mika Widgrén, 2004. "EU-Enlargement and Beyond: A Simulation Study on EU and Russia Integration," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 31(4), pages 307-323, December.
    5. Kerkelä, Leena, 2004. "Distortion costs and effects of price liberalisation in Russian energy markets : A CGE analysis," BOFIT Discussion Papers 2/2004, Bank of Finland, Institute for Economies in Transition.

    More about this item

    Keywords

    cge-models; european integration;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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