Trade Effects of the Europe Agreements

Abstract

The eastern enlargement of the European Union (EU) brought and will bring full membership to countries whose trade barriers with the EU had to a large extent already been removed under Free Trade Agreements (FTAs) during the 1990s. We employ a theory-based new version of a gravity equation, whose specification allows for an assessment of the impact of the arrangements on extra-and intra-group imports. We find robust evidence that the agreements have substantially increased intra-group trade, in the case of the Czech and Slovak Republic at the expense of the Rest of the World (ROW). * JEL classification: F15, C23

El impacto en el comercio de la ampliación hacia el este de la UE

“…Como resultado de la reducción gradual de las barreras arancelarias que culminó con la integración en la UE, el comercio de los PECOs creció a un ritmo muy acelerado: en 2003, año previo a la ampliación, las importaciones de la UE procedentes de dichos países crecieron a una tasa tres veces superior a la de las importaciones procedentes del resto del mundo (Spies y Marques, 2006). Los análisis realizados sobre la integración comercial de estas economías muestran que partían de niveles de comercio excepcionalmente bajos para, posteriormente, converger a niveles más normales.…”

Are Exports of China, Japan and Korea Diverted in the Major Regional Trading Blocs?

“…Most studies formally assessing the influence of regional trade arrangements on bilateral trade also make use of the gravity equation (see e.g. Bayoumi and Eichengreen, 1995; Frankel and Wei, 1998; and for more recent studies Ghosh and Yamarik, 2004; Carrère, 2006; Spies and Marques, 2006; Baier et al, 2007). It is worth noting that the main focus of these studies has been the trade creation effect, not the trade diversion effect 5 .…”