Influence of EU Free trade agreement

• Main Author: Eriksson, Joakim
• Format: Bachelor Thesis
• Language: English
• Published: Högskolan Dalarna, Institutionen för kultur och samhälle 2022
• Subjects: : Trade; region; agreement; intraregional; tariff; indicator; member; Economics; Nationalekonomi; Iceland
• Online Access: http://urn.kb.se/resolve?urn=urn:nbn:se:du-39465

The paper uses an impact assessment methodology with ex-ante indicator for free tradeagreement to test the trade of the European Union and countries of the FennoscandianPeninsula included Iceland. By estimates intraregional trade share, regional trade introversionindex and intraregional trade intensity the objective is to evaluate if their trade have any signsfor being natural or unnatural and if this could be because of the trade agreements. Thefoundation in trade theory is that trade should be accomplished by buying (and selling) of thecheapest producer, being neutral in their selection and choosing careful from price is positive.When this requirement does not hold trade could be expensive and therefore negative. Whentrade is conducted by choice and not by “natural roads” it could be biased, trade should befounded by comparative advantage to be positive and considered natural. The study showsthat the European Union free trade agreement have a great capital validity and some smalllevel of bias trade, although this does not mean it is bad, some level of bias trade could behard to avoid being a Union. The Nordic countries shows a biased trade, even though beingmembers of the EU or EES. The conclusion is that it is not possible to determine if the EUtrade agreement is subconsciously developing unnatural trade, but the study shows that somepartners in the union have biased trade. If this is because of the trade agreement is at this levelleft unanswered.