Trade bloc enlargement when many countries join at once

Rodolfo G. Campos and Jacopo Timini
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Rodolfo G. Campos: BANCO DE ESPAÑA

No 2515, Working Papers from Banco de España

Abstract: This paper examines the effects of trade bloc enlargement, focusing on simultaneous country entries. Using the European Union (EU) as a case study, we identify three driving forces behind changes in trade flows and welfare gains: i) reduced bilateral trade costs between candidates and current members, ii) candidates adopting the bloc’s trade policy towards outsiders, and iii) reduced trade costs among candidates. Our findings highlight the substantial impact of the third force, which may account for at least a third of the welfare gains for candidates, sometimes exceeding the other two forces combined.

Keywords: trade agreement; EU enlargement; international trade; new quantitative trade model (search for similar items in EconPapers)
JEL-codes: F13 F14 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2025-03
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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:2515

DOI: 10.53479/39258

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