Trade-Enhancing EU Enlargement and the Resurgence of East-East Trade

Cecília Hornok

24 citations0/0 files storedRePEc: Research Papers in Economics

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Global trade and economics Historical Economic and Social Studies Global Political and Economic Relations

Abstract

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.

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References

2003Gravity with Gravitas: A Solution to the Border Puzzle 2006Gravity for Dummies and Dummies for Gravity Equations 2000Non-Europe: The magnitude and causes of market fragmentation in the EU 1999Toward a Geography of Trade Costs 2000National borders and international trade: evidence from the European Union 2003Intra-national versus international trade in the European Union: why do national borders matter?2005Trade Integration of Central and Eastern European Countries: Lessons from a Gravity Model 2009International Trade Integration: A Disaggregated Approach

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2011Need for Speed: Is Faster Trade in the EU Trade-Creating?2015Has the Financial Integration affected the European Union (EU) trade with the New Member Countries from Central and Eastern Europe (CEEC) during 1994–2013?2015Central East European Countries’ accession into the European Union: role of extensive margin for trade in intermediate and final goods

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