Exports in a Tariff-Free Environment: What Structural Reforms Matter? Evidence from the European Union Single Market

38 Pages Posted: 14 Sep 2015

See all articles by Jesmin Rahman

Jesmin Rahman

International Monetary Fund (IMF)

Ara Stepanyan

International Monetary Fund (IMF)

Jessie Yang

International Monetary Fund (IMF)

Li Zeng

International Monetary Fund (IMF)

Date Written: August 2015

Abstract

How do countries enhance their exports of goods in a largely tariff-free environment? Our investigation of export performance of new member states in the European Union single market, which provides a natural control for barrier-free environment, points to the importance of structural reforms, particularly in the areas of higher education, skills upgrade, wage structure’s ability to provide incentives to work and foreign investment environment. In addition, establishing links with supply chains, which in addition to the above-mentioned reforms also depend on better institutions and infrastructure, are important. The analysis in the paper shows that new member states are at varying levels of quality and integration, which highlights the need for country-specific policy priorities. Services trade, which is subject to significant non-tariff barriers in the EU market even after the implementation of the Services Directive, shows considerable room for growth given the comparative advantage of some of the new member states.

Keywords: Export integration, structural reform, supply chain, new member states, environment, trade, incentives, Country and Industry Studies of Trade,

JEL Classification: F14, F15

Suggested Citation

Rahman, Jesmin and Stepanyan, Ara and Yang, Jessie and Zeng, Li, Exports in a Tariff-Free Environment: What Structural Reforms Matter? Evidence from the European Union Single Market (August 2015). Available at SSRN: https://ssrn.com/abstract=2659544 or http://dx.doi.org/10.2139/ssrn.2659544

Jesmin Rahman (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Ara Stepanyan

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Jessie Yang

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Li Zeng

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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