Completing the European Union Customs Union: The Effects of Trade Procedure Harmonization

Abstract:
In this article, it is pointed out that the European Union does not have a harmonized practice when it comes to trade procedures, implying that countries in the rest of the world face different trade barriers depending on which EU country they ship their goods to. Estimating the impact of trade procedures on exports from non-EU countries, a highly statistically significant and negative effect is found. Simulating what the effects would be of harmonizing trade procedures to the level of the most efficient EU countries, it is found that aggregated exports to the EU would increase by 20 per cent for the average exporter.