The Trade Effect Of Eu Enlargement And The Impact On China-eu Trade

EU finished its fifth expansion on May 1, 2004.Eight Central and Eastern European countries and two Mediterranean countries entered into the EU. Because tourism is the main source of income of the island of Cyprus and Malta,there is a big gap between the eight countries and these two countries.We just consider the eight central and eastern European countries when we study the trade creation effect and trade diversion effect. EU selected countries which have similar levels of development in its four expansions before.But this time new members have a big gap with the original fifteen EU countries in economic development.However,there are a geographical advantage and a similar history between old and new members,so that the eight countries have highly complementary with the fifteen old countries. It is easy to develop bilateral trade between old and new members.According to the theory of customs union, customs union will bring trade creation effect and trade diversion effects. In this paper, we use trade data of ten years before and after EU enlargement to prove trade creation effect and trade diversion effect. It is an extension of the existing customs union theory ,so it has important theoretical value.EU enlargement has both positive and negative effects on China.The article concludes measures which should be taken by our country. It is good for our country to consolidate and strengthen economic and trade relations with the EU ,as a result ,it has high practical significance.This article is divided into five chapters. The first chapter is an introduction and general description of the whole text. The second chapter is a theoretical basis to introduce the basic theory of customs union, and make the appropriate extension of this theory. It is a preparation for the following theoretical analysis and empirical testing. Chapters there and four is the focus of this article, in the third chapter, we study the effects of EU trade creation in both 1999-2004 and 2005-2008 periods .and analysis the reasons for this result.In chapter four, we use trade datas of China and the EU countries in1999-2008,and trade datas of China and eight countries in Eastern Europe to prove that EU enlargement has brought trade diversion effect to China.We analysis the positive and negative effects to China and then put forward policy recommendations.Chapter five summarizes conclusions of this study, looking for the inadequacies of this article, put forward the prospects for future research.