Border Effects in the Enlarged EU Area. Evidence from Imports to Accession Countries

Abstract

By looking at imports of Eastern European countries we provide novel insights on the importance and magnitude of border effects and on how they are linked with technical barriers to trade. All CEECs considered trade with themselves more than with other countries. We grouped products into three categories; old approach, new approach (including mutual recognition), and mixed. Our results show border effects are the largest for old approach products, where we expect to have the most important technical barriers. The ‘new approach’ category has the smallest border effects, while the ‘mixed approach’ products are in between. We assess if such border effects changed over the transition period and we find for new approach products and mixed approach products the magnitude of border effects was declining at the end of the 90s.