EU Enlargement and its Impacts on East Asia

40 Pages Posted: 5 Apr 2005

See all articles by Hiro Lee

Hiro Lee

Osaka University; Osaka University - Osaka School of International Public Policy (OSIPP)

Dominique van der Mensbrugghe

World Bank


Ten countries - most completing their transition from socialist-based economies to market economies - are slated to join the European Union (EU) in 2004 and four additional countries are expected to become members at some future dates. Despite a relatively small economic size of the accession countries, this type of deep integration can have non-negligible effects on countries outside of the preferential zone as the reduction in barriers across partners leads to a re-orientation of trade. In this paper, we evaluate the extent of trade adjustments and the economic impacts it will have on the East Asian economies using a dynamic computable general equilibrium (CGE) model. The overall macroeconomic effects on East Asia are small. There is some trade diversion, but there may be an opportunity to increase market penetration in some sectors of the expanding EU for which East Asia has a marked comparative advantage. The paper also assesses the relative importance of linking trade openness to productivity and lowering trade costs between the accession countries and the EU-15.

Keywords: EU enlargement, East Asia, CGE model

JEL Classification: F13, F15

Suggested Citation

Lee, Hiro and van der Mensbrugghe, Dominique, EU Enlargement and its Impacts on East Asia. Available at SSRN:

Hiro Lee (Contact Author)

Osaka University ( email )

1-31 Machikaneyama-cho
Osaka, 560-0043
81-6-6850-5619 (Phone)
81-6-6850-5656 (Fax)


Osaka University - Osaka School of International Public Policy (OSIPP) ( email )

Dominique Van der Mensbrugghe

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States
202-473-0052 (Phone)
202-522-1159 (Fax)


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