International Trade and Regional Economies: The Impacts of European Integration on the United States by David J Hayward

Author:David J Hayward [Hayward, David J]
Language: eng
Format: epub
Tags: Social Science, Sociology, Political Science, General
ISBN: 9780429703355
Google: yNmiDwAAQBAJ
Goodreads: 51859373
Publisher: Routledge
Published: 2019-04-11T00:00:00+00:00

In the following discussion, each of the four issues introduced above will be considered in evaluating the probable sectoral-level impacts upon trade. In this way, a range of impacts by sector will reveal a profile of potential trade effects that may be utilized in the shift-share forecasting model. This model will be estimated twice: first, using growth rates from the lower range of estimates; and second, using those of the higher range. Taken together, these two scenarios demarcate the upper and lower bounds of the likely impacts of EC-92 on the states' exports and, hence, their economies. These results—based upon imperfect data—are necessarily tentative and need to be regarded with caution. However, with such qualifiers they are nevertheless both illuminating and informative and a valuable contribution to the issue of international trade and regional economics.

The Expansion of EU Markets for Industrial Goods. As has been discussed above, it is widely assumed that the single market program will be responsible for a significant increase in the European Union's gross domestic product. The Cecchini (1988) report estimates an increase of between 4.3 and 6.5 percent, figures which have been challenged and revised both upwardly and downwardly. When one considers that these estimates represent a one-time real increase then they can be appreciated as being a significant boost to the European economy, particularly if Baldwin's (1989) assertions that dynamic effects will magnify these gains still further prove to be true. These estimates, however, measure gains from a welfare perspective and represent economic benefit to European consumers. They do not directly imply a growth in the demand for goods in the European market and so are not directly relevant for U.S. exporters. Undoubtedly, however, a growth in GDP of five percent will increase the demand for most or all products, with the actual relationship depending upon the income elasticity of demand for individual goods.

The estimated welfare gains for individual sectors are reported in Emerson (1988) and in Table 4.5 above, although these are not directly comparable to the U.S. SIC categories. The twenty-one European sectors approximate to the 20 manufacturing SIC categories and are included in Table 4.7 which reports the welfare gains as a percentage of output. These data are adapted from those contained in Emerson (1988) and indicate the relative magnitude of EC-92's anticipated effects across different industry sectors. Evidently, the effects of the program vary greatly: from less than 2 percent for Oil, Gas and Petroleum to as high as 14.2 percent for Office Machinery. Other sectors with high estimated effects include Electrical Goods, Motor Vehicles and Other Transport, Mechanical Engineering, and Other Manufactures.

The Effects of the Removal of Internal Barriers by Sector. Ait additional source of information on the sectoral impacts of EC-92 is found in Buiges et al.'s (1990) study. This project identified the manufacturing sectors most likely to experience the greatest impacts from the completed internal market. Attention was paid to those sectors which currently experience the greatest intra-EU non-tariff trade barriers and, hence, those which are presumed to be most affected by their removal.

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