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European integration deepening and widening: implications for Asia

  • Langhammer, Rolf J.

The paper discusses the relevance of past concerns about trade and foreign direct investment diversion to the detriment of Asian suppliers and hosts as a result of EU integration deepening and widening in the nineties. Based on recent empirical evidence, these concerns are rejected. As concerns integration deepening through the Single Market Program (SMP), trade resistance factors on the EU import side can be explained mainly by slow growth in Europe in the first half of the nineties rather than by SMP-induced trade barriers. Concerning integration widening toward Central and Eastern Europe (CEE), higher trade and investment shares of CEE are seen as a process of normalization which materialized earlier than the effects of the Europe Agreements. As trade overlaps between Asian and CEE supply on EU markets are low, the trade diversion fear is not well-founded. The paper also addresses the likely implications of the Single European Currency for Asia. Preliminary findings suggest that short-term implications are small but qualifications have to be made given the insufficient data base concerning the use of European currencies for invoicing, financial transactions, anchor and reserve purposes in Asia.

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Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 892.

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Date of creation: 1998
Handle: RePEc:kie:kieliw:892
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  1. Sheila Page, 1992. "Some Implications of Europe 1992 for Developing Countries," OECD Development Centre Working Papers 60, OECD Publishing.
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  12. Widgren, Mika, 1995. " Probabilistic Voting Power in the EU Council: The Cases of Trade Policy and Social Regulation," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(2), pages 345-356, June.
  13. Anderson, Ronald W. & Powell, Andrew, 1991. "Markets, Stabilisation and Structural Adjustment in Eastern European Agriculture," Discussion Papers (ECON - Département des Sciences Economiques) 1991007, Université catholique de Louvain, Département des Sciences Economiques.
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  15. Jocelyn Horne, 1996. "East Asia and Eastern Europe Trade Linkages and Issues," Asia Pacific Economic Papers 261, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
  16. Yusuru Ozeki & George S Tavlas, 1992. "The Internationalization of Currencies; An Appraisal of the Japanese Yen," IMF Occasional Papers 90, International Monetary Fund.
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