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Title: Accession to the WTO and EU Enlargement: What Potential for Trade Increase?

Author(s): Oxana Koukhartchouk and Mathilde Maurel

Publication Date: June 2003

Keyword(s): accession to the WTO, EU enlargement, gravity equation, institutions and transition

Programme Area(s): Transition Economics

Abstract: This Paper asks the question of the impact of institutions on trade and tries to estimate the potential for trade increase between CIS, Central Eastern European countries and the EU. The latter is computed using the gravity equation and the procedure introduced by Hausman and Taylor (1981). It is shown that CIS trade is still characterized by a very large trade destruction effect, which implies that trade with EU countries could increase in the long-run in proportion to this trade destruction effect. Furthermore, institutions matter, and the convergence of institutional variables towards the EU standards - under the current process of EU enlargement and application of Russia to join the WTO - can be expected to deepen the level of the European trade integration.

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Bibliographic Reference

Koukhartchouk, O and Maurel, M. 2003. 'Accession to the WTO and EU Enlargement: What Potential for Trade Increase?'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=3944