From imperial to regional trade preferences: its effect on Europe’s intra- and extra-regional trade

Abstract

Europe's switch from imperial to regional trade preferences has certainly raised the share of its trade that is intra-regional, but this does not necessarily mean Europe is becoming less economically integrated with the rest of the world. This paper shows that the propensity for European GDP to be traded with non-Europeans - which trebled during the hundred years to 1928 - has fallen little since then. The reason is that the re-direction of Europe's trade has been accompanied by a considerable degree of opening up to trade with non-Europeans. Data are also presented for Eastern and Western Europe separately from 1928. The hope is that Europe's latest regional integration initiatives will be able to continue this trend, rather than lead to a “Fortress Europe” outcome.