The Potential for Trade Between the Countries of EFTA and Central and Eastern Europe
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 Wint...
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ftrepec:oai:RePEc:cpr:ceprdp:853 2024-04-14T08:13:42+00:00 The Potential for Trade Between the Countries of EFTA and Central and Eastern Europe Baldwin, Richard http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=853 unknown http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=853 preprint ftrepec 2024-03-19T10:27:15Z 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. East-West Trade; Eastern Europe; EFTA; Gravity Model; Regional Integration Report Iceland RePEc (Research Papers in Economics) |
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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. East-West Trade; Eastern Europe; EFTA; Gravity Model; Regional Integration |
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Report |
author |
Baldwin, Richard |
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Baldwin, Richard The Potential for Trade Between the Countries of EFTA and Central and Eastern Europe |
author_facet |
Baldwin, Richard |
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Baldwin, Richard |
title |
The Potential for Trade Between the Countries of EFTA and Central and Eastern Europe |
title_short |
The Potential for Trade Between the Countries of EFTA and Central and Eastern Europe |
title_full |
The Potential for Trade Between the Countries of EFTA and Central and Eastern Europe |
title_fullStr |
The Potential for Trade Between the Countries of EFTA and Central and Eastern Europe |
title_full_unstemmed |
The Potential for Trade Between the Countries of EFTA and Central and Eastern Europe |
title_sort |
potential for trade between the countries of efta and central and eastern europe |
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http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=853 |
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Iceland |
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Iceland |
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http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=853 |
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