Enlargement of the European Union: A movement towards the optimal trade bloc size?

Thilo W. Glebe

Agricultural Economics Review, 2009, vol. 10, issue 2, 10

Abstract: This paper analyses how the enlargement of a trade bloc will affect national welfare. We establish a partial equilibrium model of a trade bloc either operating as a monopoly with a competitive fringe or facing a duopolistic game in production taxes/subsidies. Given this framework, we demonstrate how member countries’ welfare effects depend on their trade flow and the market power of the trade bloc. A numerical estimation of the effects of EU enlargement on the major grain crop markets suggests that welfare effects are negligible. Economic reasons are therefore unlikely to be a motivating force for further enlargement.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aergaa:58061

DOI: 10.22004/ag.econ.58061

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