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2009•Journal of Shijiazhuang of University of EconomicsRequires access

The Trade Creation and Trade Diversion after the Eastward Enlargement of EU

Guo Lan-ying

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Abstract

The EU enlarged on May 1,2004 for the fifth time.During this enlargement process most of the new member states are transformation countries.These countries have comparatively low economic development and productivity.After the eastward enlargement the interior tariff will vanish,the trade creation effect inside the EU and the trade diversion effect outside EU may happen.This paper analyzes the trade creation and trade diversion effects.It concludes that the eastward enlargement will not change the development trend of China-EU trade radically.The paper gives the policies we have to make to cope with this issue.

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What this paper is about

The EU enlarged on May 1,2004 for the fifth time.During this enlargement process most of the new member states are transformation countries.These countries have comparatively low economic development and productivity.After the eastward enlargement the interior tariff will vanish,the trade creation effect inside the EU and the trade diversion effect outside EU may happen.This paper analyzes the trade creation and trade diversion effects.It concludes that the eastward enlargement will not change the development trend of China-EU trade radically.The paper gives the policies we have to make to cope with this issue.

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Available abstract

The EU enlarged on May 1,2004 for the fifth time.During this enlargement process most of the new member states are transformation countries.These countries have comparatively low economic development and productivity.After the eastward enlargement the interior tariff will vanish,the trade creation effect inside the EU and the trade diversion effect outside EU may happen.This paper analyzes the trade creation and trade diversion effects.It concludes that the eastward enlargement will not change the development trend of China-EU trade radically.The paper gives the policies we have to make to cope with this issue.

Key concepts: Resizing, Trade diversion, Trade creation, China, International trade, International economics, Tariff, Economics

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