Вип. 14. Економічні студії

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Does EU Really Encourage Trade? The Effect of EU Market Enlargement on Ukraine's Trade Policy
(2004) Ivus, Olena
This study empirically investigates the effect of the EU integration on trade, analyses evolution in trade patterns of European economies and focuses on the effect of Candidate Countries' accession to the EU on Ukrainian trade performance. The gravity model of international trade is used to assess trade patterns between countries within one or different preferential trade arrears. The results suggest that a pair of countries both in the EU trade 210 percent more than do a pair of countries outside the EU. The findings reject a hypothesis that the EU integration implies trade diversion vis-a-vis the rest of the world. EU members increase the trade with non-member countries by 32 percent. Thus, EU future enlargement will not lead to a large trade diversity effect on the Acceding countries trade with Ukraine. However, with result should be taken with caution, because the model do not captures specific characteristics of EU trade with Ukraine. Taking into account the dynamic benefits of EU integration, Ukrainian trade reorientation towards the EU market is strongly encouraged.