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Abstract Eastern enlargement will be costly to incumbent EU countries, as the new members will all be net recipients of EU funds. A balanced view requires that the gains from integration be set against this cost. Drawing on established theories of economic integration, this paper first identifies typical fallacies present in policyoriented thinking about gains from trade liberalization and the role of preferential trading blocs like the EU. Using detailed data on east-west trade for each of the present member states, as well as the relevant trade barriers of the EU and applicant countries, it then presents empirical estimates on the likely orders of magnitude for integration gains. Comparing these to country-specific estimates of the fiscal burden from enlargement, it identifies likely winner and loser countries.
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