Assessing the Enlargement and Deepening of the European Union

This paper estimates a theoretically-motivated gravity model to examine the effect of the European Union (EU) on trade and whether the order of entry has affected the trade performance of member countries. Additionally, we analyse the impact of the different phases of EU integration on trade. The results show that both original countries and successive enlargements boost intra-bloc trade. Moreover, the results suggest that the deepening in the integration process has led to more trade creation among members. Finally, only the latter phase of the European integration process (the single currency) has increased trade with non-members.