IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/853.html
   My bibliography  Save this paper

The Potential for Trade Between the Countries of EFTA and Central and Eastern Europe

Author

Listed:
  • Baldwin, Richard

Abstract

Recent events, historical evidence and geographical proximity suggest that the six EFTAns and twelve Central and East European countries (CEECs) are natural trading partners. This paper evaluates this suggestion by estimating the potential for EFTA-CEEC trade using the gravity model of Wang and Winters (1991). The findings show that even at 1989 CEEC income levels, EFTA-CEEC trade should have been four times greater than it was. Thus the CEEC markets should have been as important to Austria, Iceland and Switzerland as were the EFTA markets. A second estimation is carried out assuming that CEECs' incomes catch up to 70% of the EC's by 2005, 2010 and 2020. In this scenario, EFTA-CEEC trade grows at double digit rates for decades, finally attaining a level where CEEC markets account for almost a fifth of EFTA members' exports to all of Europe.

Suggested Citation

  • Baldwin, Richard, 1993. "The Potential for Trade Between the Countries of EFTA and Central and Eastern Europe," CEPR Discussion Papers 853, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:853
    as

    Download full text from publisher

    File URL: http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=853
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Waheed Akram Butt, 2008. "Pakistan's Export Potential: A Gravity Model Analysis," SBP Working Paper Series 23, State Bank of Pakistan, Research Department.
    2. Kalman Dezseri, 2000. "Economic relations between Russia and the Central European countries," IWE Working Papers 111, Institute for World Economics - Centre for Economic and Regional Studies- Hungarian Academy of Sciences.
    3. Gros, Daniel & Gonciarz, Andrzej, 1996. "A note on the trade potential of Central and Eastern Europe," European Journal of Political Economy, Elsevier, vol. 12(4), pages 709-721, December.
    4. Aurora A.C. Teixeira & Natércia Fortuna, 2006. "Human capital, trade and long-run productivity. Testing the technological absorption hypothesis for the Portuguese economy, 1960-2001," FEP Working Papers 226, Universidade do Porto, Faculdade de Economia do Porto.
    5. Frédérique Festoc, 1997. "Le potentiel de croissance du commerce des pays d'Europe centrale et orientale avec la France et ses principaux partenaires," Économie et Prévision, Programme National Persée, vol. 128(2), pages 161-181.
    6. Lindström, Maarit, . "Locational Sources of Competitiveness: Finnish Companies' International Business Operations in the Baltic Sea Region," ETLA A, The Research Institute of the Finnish Economy, number 37, May.
    7. Fidrmuc, Jarko, 1999. "Trade Diversion in the 'Left-Outs' in the Eastward Enlargement of the European Union," Transition Economics Series 8, Institute for Advanced Studies.
    8. Partanen, Anssi, 2002. "Trade Potential around the Baltic Rim: A two-model experiment," Discussion Papers 645, The Research Institute of the Finnish Economy.
    9. Michalska, Grazyna & Goodhue, Rachael & Small, Arthur, 1995. "Implications of Gatt for Eastern Europe and the Baltics," CUDARE Working Papers 201478, University of California, Berkeley, Department of Agricultural and Resource Economics.
    10. Paas, Tiiu, 2002. "Gravity approach for exploring Baltic Sea regional integration in the field of international trade," HWWA Discussion Papers 180, Hamburg Institute of International Economics (HWWA).
    11. Partanen, Anssi & Hirvensalo, Inkeri, 2002. "North- and Westbound Foreign Trade Potentilal of the Baltic Rim," Discussion Papers 678, The Research Institute of the Finnish Economy.
    12. Jakab, Zoltan M. & Kovacs, Mihaly A. & Oszlay, Andras, 2001. "How Far Has Trade Integration Advanced?: An Analysis of the Actual and Potential Trade of Three Central and Eastern European Countries," Journal of Comparative Economics, Elsevier, vol. 29(2), pages 276-292, June.
    13. Jinhwan Oh & Orgilbold Tumurbaatar, 2011. "Mongolia's International Trade: Impact of Its Geographical Location," Working Papers EMS_2011_02, Research Institute, International University of Japan.
    14. Cheptea, Angela, 2010. "Border Effects and East-West Integration," Working Papers 210391, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).
    15. Paas, Tiiu, 2002. "Gravity Approach for Exploring Baltic Sea Regional Integration in the Field of International Trade," Discussion Paper Series 26379, Hamburg Institute of International Economics.
    16. Jarko Fidrmuc & Peter Huber & Jan Jakub Michalek, 1999. "Poland's Accession to the European Union: Demand for Protection of Selected Sensitive Products," WIFO Working Papers 117, WIFO.
    17. Margarida Ponte Ferreira, 1994. "Integrating Poland in the World Economy: An Assessment of the Impact of Trade Liberalisation and Growth," The World Economy, Wiley Blackwell, vol. 17(6), pages 869-884, November.

    More about this item

    Keywords

    East-West Trade; Eastern Europe; EFTA; Gravity Model; Regional Integration;

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:853. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.