European Enlargement and Single Market Accession: A Mistreated Issue

From 2004, enlargement of the European Union is expected to bring substantial net economic benefits. Herein lies a weakness, in that practically all empirical studies characterise ‘single market’ accession using simple ad hoc uniform percentage reductions in trade costs. Employing a modified gravity specification we estimate these costs and derive non-tariff barrier (NTB) equivalents, whilst associated regional impacts are calculated within a computable general equilibrium (CGE) framework. Our results suggest that spatial effects in gravity estimations have a dampening impact on NTBs for eleven of our sixteen sectors, which is reflected at the regional level.