Trade Structure during Accession to the EU

This article discusses the degree of trade restructuring between the EU and the new member states during the accession process. Intra-industry trade is selected as a composite indicator of trade structure. Factor endowments, market size and distance are the most important determinants of intra-industry trade. The estimations for the OECD countries are used to compute predictions for EU15 trade with the CEE countries. In general, this approach predicts well the EU15 trade structure with CEE, which proves significant restructuring in the new member states. High shares of intra-industry trade imply lower welfare losses and less resistance to further deepening of integration in the participating countries.